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

Monday, December 31, 2018

December 2018 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for December 2018. The reported stories reflect at least 9 new Ponzi schemes worldwide; about 144 years of newly imposed sentences for people involved in Ponzi schemes; 3 guilty pleas or convictions, and an average age of approximately 51 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Gershon Barkany, 34, was sentenced to 56 months in prison in connection with a $62 million Ponzi scheme that defrauded more than 10 victims. Barkany had pleaded guilty to wire fraud in 2013 in connection with the scheme that persuaded more than 10 people to invest in supposed “risk-free” deals to buy and resell real estate in New York and New Jersey. He fooled investors by creating false documents, including purchase agreements and escrow agreements.

Annette Bongiorno, 70, the former secretory for Bernard Madoff, is seeking an early release from prison. Bongiorno has served two-thirds of her 6-year prison sentence and is asserting that she should be released to home confinement. Bongiorno maintained that she was unaware of Madoff’s Ponzi scheme.

Vincent P. Falci, 59, of New Jersey, was convicted on charges in connection with a $10 million Ponzi scheme. The scheme stole money from the savings of policemen, firemen, and retirement funds for first responders. More than 200 victims were defrauded when Falci told them that their money was conservatively managed and would generate high returns with little risk. Falci controlled investment funds under the names Saber Funds and Vicor Tax Receivables LLP.

Jordan E. Goodman of New York was charged with securities fraud by the SEC in connection with his activities in soliciting investments into the real estate Ponzi scheme known as Woodbridge Group of Companies. The scheme, run by Robert Shapiro, brought in $1.2 billion, and Goodman’s 1,200 clients invested about $147 million of that amount. Goodman helped a company known as Knowles Systems, Inc., owned by Lynette M. Robbins, raise the funds. Robbins was charged by the SEC in connection with the scheme in August. Goodman did not disclose to his clients that he was receiving kickbacks for their investments. He received about $2.3 million in kickbacks. Goodman holds himself out as “America’s Money Answers Man,” and he advertised the Woodbridge investment in media appearances, calling the investments “safe” and “secure.” Alan H. New and David S. Knuth, co-owners of Synergy Investment Services, were also charged. The following additional 10 individuals were also charged: Robert S. "Lute" Davis, Donald Anthony Mackenzie, Aaron R. Andrew, Jeffrey L. Wendel, Randy T. Rondberg, Richard Fritts, Marcus Bradford Bray, Gregory W. Anderson, Claude Steven Mosley, and Gregory A. Koch.

Michelle Labra, 47, of Illinois was charged in connection with an alleged real estate Ponzi scheme that took more than $23 million from more than 25 investors. Labra is a suburban real estate broker who owned and operated Labra Group Realtors. She promised investors returns of more than 14% on short-term, high-interest mortgages to borrowers. However, prosecutors allege that Labra never actually underwrote any loans and told investors that the reason investors were not getting their money and returns was because the IRS had seized the funds.

Thomas Lanzana, 51, formerly of New Jersey and now of South Carolina, was accused of running a Ponzi scheme that defrauded at least 20 people out of about $900,000. Lanzana falsely claimed that he was a successful forex trader, delivered false account statements to his customers showing falsified balances, and sent false tax documents to customers reporting earnings that did not exist. Last year, the CFTC filed a civil enforcement action against Lanzana and Blackbox Pulse, LLC.

Juan Miguel Lopez, 54, of Texas, was sentenced to 79 years in prison for operating a Ponzi scheme that defrauded investors out of $4.9 million. Lopez fraudulently promised investors returns from the supposed financing of small business loans. He targeted Hispanics who were not otherwise able to obtain loans.

Hector May, 77, and his daughter, Vania May Bell, both of New York, were charged by the SEC with running a $7.9 million Ponzi scheme through Executive Compensation Planners Inc. They were accused of lying to investors by telling them their money was invested in bonds when in reality the money was spent to pay for personal and business expenses as well as luxury items such as jewelry, furs, vacations and a limousine driver. Criminal charges were also brought against May, who has pleaded guilty to the charges.

Steve Pagartanis, 59, of New York pleaded guilty to charges relating to a Ponzi scheme that spanned 18 years and scammed 17 victims. Over $13 million was invested in the scheme and there were actual losses of more than $9 million. Pagartanis solicited elderly victims to invest in real estate-related investments that were supposedly secure and earned fixed returns between 4.5% to 8%. Investors were told that their money was being invested in a publicly traded Canadian company called Genesis Land Development. Instead, he used the money to pay for his personal expenses and on luxury items such a jewelry, airline tickets, massages and cigars.

Priceville Partners LLC, a used car and title loan company, was labeled a Ponzi scheme by its bankruptcy trustee, calling it “really no different than a little Bernie Madoff.” Greg Steenson, 49, was the managing partner of Priceville Partners and is currently in jail awaiting trial on charges including theft, forgery, securities violations, and financial exploitation of the elderly.

Ernest Romer III, 57, of Michigan was sentenced to 7 to 20 years in prison for spending $3 million of his clients’ money. Romer worked for CoreCap Investments LLC and targeted senior citizens by convincing them to invest their funds with him. Instead, he used their money for high-risk investments and for personal expenses.

Denise Gunderson Rust and Joshua Daniel Rust were included in the CFTC complaint against Gaylen Dean Rust and Rust Rare Coin, Inc. in which the CFTC alleges that the defendants were running a precious metals Ponzi scheme. Denise and Joshua are accused of knowing that Silver Pool, a commodities pool, was a fraudulent scheme and that they signed checks issued to Silver Pool investors knowing that they were Ponzi payments. The amended complaint also alleges that the pool involves 430 individuals and at least $200 million, up from the 200 individuals and $170 million that was originally alleged.

Brian Thomas Sapp, 38, pleaded guilty to charges relating to his $1.4 million real estate Ponzi scheme that defrauded 20 investors. Sapp claims he was buying distressed properties in Virginia, Maryland and Washington D.C. and would sell them generating returns as high as 25%. Sapp used DocuSign to forge digital signatures on fraudulent contracts to prove to investors that he was supposedly selling houses and generating the returns he had promised.

John Gregory Schmidt, 67, was arrested on charges in connection with an alleged scheme run through Schmidt Investment Strategies Group. Schmidt created false financial statements and sold securities without the knowledge or approval of his investors. Prosecutors have alleged that, “For years, this defendant defrauded a number of investors, many of them elderly or with dementia. He had to keep stealing from more investors in order to cover for the thefts from other investors,” The SEC has also filed charges.

Gary Todd Smith, 49, was sentenced to 40 years in prison and ordered to pay $63.4 million in restitution in connection with a scheme run with his father, Gary Truman Smith, through Smith Advertising, a North Carolina agency that represented local tourism agencies. The Smiths borrowed money from more than 150 investors and the agency was worth negative $169.8 million when it collapsed in 2012.

Jeremy Spence was sued along with others in connection with an alleged Ponzi scheme run through Coin Signals. Spence allegedly held himself out as a successful crypto trader, offering “lucrative returns” supposedly generated through a series of crypto hedge funds including Alts Fund, Long Terms Fund, Evermarkets ICO, and Coin Signals Mex (CSM) Fund. The complaint alleges that the CSM Fund held as much as 1,300 Bitcoin valued at more than $10 million.

Christopher B. Warren, 50, of Florida, was charged in Tennessee with running a solar farm Ponzi scheme in Nashville. Warren founded Clean Energy Advisors, claiming to own solar farms in North Carolina which would be sold to Duke Power. Warren defrauded 60 investors and promised them returns from the supposed sale revenues. Warren pleaded guilty and admitted there was never going to be a sale and that he still owes investors at least $15 million.

INTERNATIONAL PONZI SCHEME NEWS

Australia

Aimee Ploi Pitman, 27, and her partner, Colin Voeuk, 32, were sentenced to seven years in jail in connection with an ATM Ponzi scheme that defrauded up to 17 investors out of $1.7 million. The pair pleaded guilty to benefit by deception. Pitman was a lifestyle blogger who was the face of the scheme.

Chris Marco, 60, has been accused of running a $240 million Ponzi scheme that defrauded 130 investors. The scheme, run through Coastline Group, allegedly promised investors large profits from complex financial deals in Europe.

Cambodia

Huot Sovann is the subject of extradition proceedings in connection with a $400 million Ponzi scheme that defrauded tens of thousands of Cambodians. The scheme was run through Empire Big Capital, Asian Investment Fun, and Investment Consultant Association. The scheme promised returns of 10% on minimum investments of $2,000.

China

Six people were arrested in connection with an alleged $173 million scheme run through financeofchina.com that claimed to be a peer-to-peer lending platform. The scheme allegedly promised annual returns of 14% but did not have a financial license.

England

Mark Starling, 57, was arrested in connection with an alleged £3 million Ponzi scheme. Starling claims to be running three funds – the Pilot Dax Fund, the Shadow Dax Fund, and the Pilot Eurostoxx Fund. He was a self-described “proprietary futures trader” and promised investors returns of 12% to 18% per year.

India

Methuku Ravinder, the chief executive officer of Sun Pariwar Group of companies, was arrested and assets of Rs 14 crore were frozen. Ravinder had been a government school teacher but, unhappy with his salary, he started as many as 8 businesses, such as Sun Mutually Aided Thrift and Credit Cooperative Society Ltd, Methuku Chit Funds, and Methuku Ventures, all operating under the umbrella of Sun Pariwar.

Premkumar aka Mukesh Katara was arrested for defrauding investors in connection with Dream Pacific Vision scheme. The scheme promised investors doubling of their money.

Police arrested 10 individuals in connection with an alleged Bitcoin-related Ponzi scheme called GB21. The scheme defrauded 8,000 investors and promised them 10% or more in monthly returns. Amit Bharadwaj and his brother Vivek had been arrested in connection with Gain Bitcoin earlier in the year. Akash Sancheti and Sahil Omprakash Bagla were also arrested in connection with the scheme.

Babita Ravat, 36, was accused of running a Ponzi scheme through her company, Jeevan Seva Company Pvt. Ltd. Ravat had 20,000 agents luring in investors into the scheme.  Co-owners of the company, Ravi Kadam and Sandeep Behravat, were arrested as was Mustaq Shaikh, who used to work at the company. Harish Labana and Indrajeet Prajapati are still on the run.

New Zealand

Kelvin Clive Wood, 69, pleaded not guilty to charges that he was running a $7 million Ponzi scheme as a foreign trader. The more than $7 million was taken from 18 investors.

Lance Jack Ryan aka Lance Thompson, who was sentenced last year to 7 ½ years in prison for his role in the BlackfortFZ Ponzi scheme that defrauded 900 people, had his sentenced reduced. The scheme had lured in approximately $8.3 million, and about $4.1 million of that was lost as no foreign exchange trading actually occurred. Jimmie McNicholl was convicted and also sentenced to 11 months home detention in connection with the scheme. Ryan had pleaded guilty and appealed his sentence as being too high relative to comparable sentences. Ryan was resentenced to 6 years imprisonment.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The receiver appointed to administer the Arthur Lamar Adams and Madison Timber Properties LLC $100 million Ponzi scheme case filed a complaint against the law firms Butler Snow and Baker Donelson LLC and two employees of the firms. The receiver alleges that the firms and individuals acted recklessly in advising investors. Both firms and the individuals have denied any involvement or wrongdoing in the matters alleged. Separately, the University of Mississippi agreed to return about $310,000 that was donated to the University by Adams.

The Ninth Circuit upheld a lower court ruling that an investor who referred other investors into the Nationwide Automated Systems Inc. Ponzi scheme was forced to return about $750,000 in referral fees. The court found that the referral fees did not constitute “reasonably equivalent value. Hoffman v. Markowitz, 2018 U.S. App. LEXIS 36243 (9th Cir. Dec. 24, 2018).

Friday, November 30, 2018

November 2018 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for November 2018. The reported stories reflect at least 12 new Ponzi schemes worldwide; about 60 years of newly imposed sentences for people involved in Ponzi schemes; 4 guilty pleas or convictions, and an average age of approximately 50 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Gary L. Cain, 61, was arrested in Texas just two days before he was to begin serving his prison sentence in connection with a Ponzi scheme run with former state Sen. Carlos Uresti, 54. A jury previously found Uresti and Cain guilty in connection with the fracking enterprise run through FourWinds Logistics. FourWinds CEO Stanley P. Bates pleaded guilty earlier this year.

Craig Carton, 49, was convicted for his role in a ticket-selling Ponzi scheme. Prosecutors had alleged that Carton had misappropriated at least $5.6 million. Michael Wright, 42, pleaded guilty to charges related to the scheme in September. They were accused of soliciting investors to fund a business of buying and reselling blocks of tickets to music, entertainment and sporting events. Joseph Meli is currently serving 6½ years in prison for the scheme. Meli’s wife, Jessica Ingber Meli, was ordered to pay $4 million in connection with the SEC action in which she was named as a relief defendant.

Stephen Tudor Crozier, 66, of California, pleaded guilty to charges relating to a scheme that defrauded investors out of more than $1 million. Crozier held himself out as a financial advisor with knowledge of the European financial markets.

Michael D’Alessio, 53, pleaded guilty to charges related to an alleged Ponzi scheme run through Michael Paul Enterprises in New York. The scheme involved luxury real estate developments that defrauded investors out of approximately $58 million.

Rabbi Zvi Feiner of Chicago was accused of defrauding investors in his local Jewish community out of more than $35 million. Feiner is the head of Feiner Investment Corporation, which was running an alleged nursing home investment scheme.

Edwin Fujinaga,72, was convicted in connection with his role in the $1.5 billion Ponzi scheme run through MRI International Inc. The scheme defrauded more than 10,000 Japanese investors by promising them that their money would be used to purchase medical claims. Fujinaga used less than 2% of the investor funds for that purpose and instead used the money to pay earlier investors and to buy a private jet, a mansion, real estate in Hawaii and Beverly Hills, and luxury cars.

Sebastian Greenwood was arrested and extradited to the U.S. in connection with the OneCoin scheme. Greenwood was arrested in Thailand and is accused of being involved in a $400 million money laundering scheme through OneCoin. Greenwood is believed to have been second in command at OneCoin behind Ruja Ignatova.

Khemraj Dave Hardat, 50, was charged for allegedly defrauding investors out of $5 million in a Ponzi scheme. Hardat is a Canadian national who has been living in Los Angeles on an expired tourist visa. Hardat allegedly defrauded at least 7 investors by falsely claiming that NBA stars such as Stephen Curry and Shaquille O’Neal were endorsing his products. He misrepresented that he had a postgraduate doctoral degree from Yale and used falsified bank statements to lure in investors. Hardat used the funds for payments on his Maserati and Lamborghini, among other things.

Gaylen Dean Rust and Rust Rare Coin, Inc. of Utah were charged by the CFTC with running an alleged $170 million Ponzi scheme. The scheme allegedly defrauded at least 200 people in a commodities pool called Silver Pool. Investors were told they were buying into a share of a pool that purchased precious metals and were promised annual returns of 20% to 25%. The CFTC lawsuit also names Denise Gunderson Rust, Joshua Daniel Rust, Aleesha Rust Franklin, R. Legacy Racing Inc., R Legacy Entertainment LLC, and R Legacy Investments LLC as relief defendants.

Robert Shapiro, the former Chief Executive Officer of Woodbridge Group of Companies, agreed to pay $120 million to the SEC to settle allegations that he ran a $1.2 billion real estate Ponzi scheme. Shapiro did not admit or deny the allegations. The scheme targeted 8,400 investors and promised returns as high as 10% from investments in developers who flipped luxury real estate. Meanwhile, another broker, Dennis Ferwerda, was barred from FINRA for his involvement in selling investments in the Woodbridge Ponzi scheme.

Brandon Walton Stewart, 33, of California was sentenced to 35 years in prison in connection with $13.5 million Ponzi scheme. Stewart promised investors that he would use their money to buy stocks in companies such as Facebook.

Bobby Duane Vise, 53, of Texas, was sentenced to 13 years in prison and ordered to pay $1.27 million to 12 victims in connection with a Ponzi scheme that defrauded investors out of more than $1.2 million. Vise pleaded guilty to running a real estate investment scheme.

Roland Von Kurnatowski, 67, of New Orleans was accused of running a Ponzi scheme. A lawsuit filed against Von Kurnatowski alleges that he persuaded investors to invest in Bond Fund One, or BF-1, which would trade U.S. Treasury bills. The scheme defrauded investors out of hundreds of thousands of dollars.

April Vuong, 42, and Hao Quach, 41, were each sentenced to six years in prison in connection with a Ponzi scheme and will be sentenced to an additional 5 years in prison if they fail to pay restitution for the next 10 years.

INTERNATIONAL PONZI SCHEME NEWS

Canada

Robert Castano was permanently banned from any involvement in securities transactions. Castano previously pleaded guilty to defrauding investors by promising monthly returns of 5% from trades on the stock market. The scheme brought in more than $2.5 million through his company, Skyline Communications, $1.5 million of which was lost.

England

Essex and London Properties Limited was shut down following findings that the company misused £18.9 million of investor funds. The scheme involved more than 800 investors who were promised 8% returns annually if the money was held for 3 years, or 12% if the money was held for one year. The company claimed to generate the returns from the purchase and resell of properties or from rental income. In reality, the company only purchased one property.

Japan

Eight men were arrested in connection with an alleged $73 million cryptocurrency Ponzi scheme.  The scheme defrauded 6,000 people by promising them between 3% and 20% returns. The company, Sener Trader, claimed to be a U.S.-based investment firm. Sener Trader created a bogus Amazon ebook listing for its fictional CEO, “Spenser Brown” to try to hide the company’s Japanese origins. Six of the 8 men plead guilty and two have maintained their innocence. Sener Trader was formed after the demise of a prior scheme run by Eagle Gates Group.

India

Goodman Goqo, 33, pleaded not guilty to charges that he defrauded more than 4,000 people out of R76m. Goqo ran the scheme through his business, Ingede Mineral Holdings. He advised investors that he would invest their money on the stock exchange and offered them 30% monthly interest over six months with the principal guaranteed.

Sudipto Roy Choudhary, 44, was arrested in connection with the Rose Valley Ponzi scheme. The chairman of the scheme, Gautam Kunda, was arrested in 2015.

Braja Mohan Patnaik, 44, and his wife, Tridhara Mohanty, 40, were arrested on charges that they collected approximately Rs. 60 crore from over 1,550 investors in a number of schemes. They were directors of Datum Marketing Limited, which was used to lure in investors.

Gali Janardhan Reddy and Ali Khan were arrested in connection with an alleged $1 million Ponzi scheme that promised investors returns of 40% to 50% a month. Reddy is accused of taking Rs 20 crore from Syed Ahmed Fareed, the owner of Ambidant Marketing Pvt Ltd. to strike a deal with officials to drop the case they were investigating against Ambidant. Fareed and Ambidant are under investigation for defrauding hundreds of investors. Fareed is alleged to have run the scheme with his son, Syed Afaq. They are involved with the following other firms in India as well: Ambidant Constructions Ltd., Ambidant Marketing and Trading Company, Profit Theme, Ammar Enterprises, Ambidant Global Solutions, Ambisheltar, Perinet Technologies, Ambigold, Webworld, and Ambidant Marketing Financial Services LLC (Dubai).

Assets of Gold Sukh Trade India Ltd. and its directors Narendra Singh, Mahendra Kumar Nirwan, Manvendra Pratap Singh Chauhan and Bablu Sharma were seized by authorities in connection with an alleged Ponzi scheme.

Malay Banerjee and R P Dasora were arrested in connection with an alleged scheme involving Kim Infrastructure and Development Limited. The scheme allegedly defrauded 5,000 agents and investors who were promised that their money would be doubled or tripled.

Vinay Shah was arrested after being on the run for two weeks in connection with an alleged Ponzi scheme that defrauded investors out of Rs 260 crore. Shah’s wife, Bhargavi is still on run but Shah’s friend Chanda Thapa was also arrested.

Four people were charged in connection with the GainBitcoin cryptocurrency scheme.  Vivek Bharadwaj, Pankaj Adlakha, Hemant Bhope and Amit Bharadwaj will face trial in December.

Charges were filed against tviexpress.com and its promoters and associates, Tarun Trikha, Varun Trikha, Sikha Trikha, Shakti Sharad, and Anoop Kumar. They are accused of running a scheme involving share trading, commodities trading, holiday package booking, and air ticketing. Investors were promised that their money would double in a year, but the returns have not been paid.

Nigeria

Michael Eke, the founder of Micheno Micro Cooperative Society, was arrested in connection with an alleged N27 million Ponzi scheme.

Kayode Samuel and Kola Banji were arrested in connection with an alleged Ponzi scheme known as D9 Club. The scheme is believed to have defrauded at least 200 investors.

Wednesday, October 31, 2018

October 2018 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for October 2018. The reported stories reflect at least 9 new Ponzi schemes worldwide; about 46 years of newly imposed sentences for people involved in Ponzi schemes; 5 guilty pleas or convictions, and an average age of approximately 52 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Arthur Lamar Adams, 58, of Mississippi was sentenced to 19½ years in prison in connection with a Ponzi scheme run through Madison Timber Properties, LLC. Adams obtained over $100 million from more than 250 investors located in at least 14 different states. Madison Timber held itself out as being in the business of buying timber rights from landowners and then reselling those rights to lumber mills at a higher price. The investors understood they were providing the financing for the purchase contracts for the timber rights. Investors were guaranteed returns of 12-13% interest. Adams had previously pleaded guilty and admitted it was a Ponzi scheme.

Yehuda Belsky aka Jay Bell, was charged with running a $1.25 million commodities scheme that defrauded at least 14 customers. Belsky, the owner of Y Trading LLC, had previously been barred for life by the CFTC from trading in commodities, but was holding himself out as a successful commodities trader.

Dawn Bennett, 56, was found guilty of defrauding investors in a $20 million Ponzi scheme. Bennett testified at her trial that she paid approximately $720,000 to arrange for priests to perform religious ceremonies to help her and she cast “hoodoo” spells on investigators to ward off a federal investigation. Bennett raised more than $20 million from 46 investors in connection with her luxury sportswear business, DJB Holdings later known as Province of the Dragon. Bennett and coworker, Bradley Mascho, overstated the company’s sales and liabilities to their investors. Mascho previously pleaded guilty. Bennett used the investors’ money to pay for jewelry, cosmetic medical procedures, and a $500,000 annual lease for a luxury suite at the Dallas Cowboys’ home stadium.

J.T. Bramlette, 40, Anthony Hartman, 58, Travis Kozlowski, 38, and Aaron Wernli, 39,were charged by the SEC in Utah with alleged securities violations in connection with a $10.8 million investment scheme. The scheme involved the Melrose Resort in which investors were promised false returns of up to 24% and were provided false reports and statements. Bramlette was the “ringleader of the fraud” and the others raised funds for the project through Private Placement Capital Notes II, LLC, Synergy Capital Management LLC, and Pelorus Group. Bramlette used at least $1.5 million to pay personal expenses, including trips to Disneyland, shopping sprees on Rodeo Drive, Las Vegas trips, and a Land Rover.

Kevin Brody, 54, and Matthew Eckstein, 48, of New York, were charged in connection with a $10 million scheme that allegedly defrauded 40 senior citizens. Brody and Eckstein are financial advisors who convinced clients to invest their retirement savings in their company, Conmac Funding Corp., with assurances that the investments were safe and that they would earn 4% interest.

Craig Carton, 48, has filed papers asking a court to prevent prosecutors from calling his alleged ticket scheme a Ponzi scheme or using the words “sham,” “fleece” and “fraudulent.” The court denied his request. Carton was arrested last year on charges that he was running a $4.6 million scheme in which he used money from investors in a ticket reselling business to pay his gambling debts. Carton was accused along with Michael Wright, 42, and Joseph Meli of running a ticket Ponzi scheme by soliciting investors to fund a business of buying and reselling blocks of tickets to music, entertainment and sporting events. Meli is currently serving 6½ years in prison for the scheme. Carton has pleaded not guilty.

Jean Danhong Chen, 53, and her husband, Tony Jianyun Ye, 50, along with Kai Hao Robinson, 45, Kuansheng Chen, 60, the Law Offices of Jean D. Chen,  and Tree Lined Holdings, LLC fka Tree Lined Properties, LLC were named in a lawsuit filed by the SEC in connection with an EB-5 scheme in California. The scheme brought in millions of dollars from foreign investors seeking permanent U.S. residency through the EB-5 Immigrant Investor Program. The defendants were paid over $10 million in commissions in connection with the scheme. The SEC also alleged that Chen and Ye secretly acquired and operated an EB-5 regional center, Golden State Regional Center LLC.

Kevin Cecil Drost, 61, was charged in connection with a $5 million offering fraud through Maryland-based Owings Group, LLC. Drost was a salesman, along with Brian Koslow and David Waltzer, for the scheme run by Mark Johnson. The SEC had charged the group with securities fraud earlier in the year.

Nicholas Gelfman of New York entered into a consent order with the CFTC and a default judgment was entered against and his company, Gelfman Blueprint, Inc. A $2.5 million fine was levied against Gelfman and his firm. Gelfman took in more than $600,000 from at least 80 customers who understood they were entering into contracts of sale of Bitcoin through electronic web-based Bitcoin trading platforms. Gelfman represented he had a high performing algorithmic trading computer program named Jigsaw that generated monthly profits of 7% to 11% and protected against risk. The CFTC had alleged that Gelfman created false performance reports showing positive Bitcoin trading gains and then staged a fake computer hack to further conceal losses and misappropriation.

Kevin Kyes, 70, was sentenced to 5 years in prison and ordered to pay more than $3.6 million in restitution in connection with a $7 million Ponzi scheme that targeted 60 Japanese investors. Kyes worked with a partner, John Holdaway, 74, to defraud investors through their business, Money Management Strategies. They represented that they could do high-speed trading with 100% returns on investments.

Wayne McKelvey, 55, was convicted for his role in a $54 million Ponzi scheme run through Mantria Corp. McKelvey is a former insurance salesman who raised money for the scheme run by Troy Wragg and Amanda Knorr, both of whom previously pleaded guilty. The scheme promised profits from green technology that would turn trash into fuel and “carbon-negative” housing developments. McKelvey had raised money for the scheme through his “Speed of Wealth” seminars, telling investors that Mantria was the next Microsoft and that it was “on the cusp of a revolutionary technology that’s going to change the world, and you guys can benefit from it by putting money in and getting stinkin’ wealthy.”

Raymond K. Montoya, 70, pleaded guilty to charges that he ran scheme through a pooled investment known as RMA Strategic Opportunity Fund LLC for 8 years. Montoya represented to investors that they were earning substantial returns when the fund was actually sustaining significant losses. Montoya promised investors returns from investments in stocks and bonds, but only a portion of the money was actually invested. The rest was diverted for his personal expenses such as luxury vehicles and the mortgage on his son’s residence. Montoya told investors he had $5 billion in assets in his fund when the highest amount he ever had was about $20 million.

Edward Lee Moody Jr., 47, of Virginia, was criminally charged and then pleaded guilty in connection with a 13-year scheme that collected $6.1 million from 53 investors. Moody had previously been named in an SEC lawsuit, along with his companies, CM Capital Management LLC and G.E. Holdings Corp. Moody used at least $1.4 million of the investor funds to pay business expenses, purchase a home, make car loan payments, shop, and travel to Las Vegas and other destinations.

Stephen Condon Peters, 45, of North Carolina, faced additional charges in connection with an alleged $15 million Ponzi scheme run through VisionQuest Wealth Management. Peters ran the alleged scheme by selling notes in VisionQuest Capital, and the notes were then sold to clients of VisionQuest Management. Both companies were owned by Peters. Investors were promised returns of 8%, or 9% if they chose to forego interest and reinvest. The investor funds were used by Peters to purchase, among other things, luxury vacation home in Costa Rica, a horse farm in Wake County where he lived, a Cadillac Escalade, properties in Jacksonville and Ferguson, N.C., farm equipment, a gun collection with rifles and pistols, and diamond jewelry.

Jason Rhodes, 46, of Connecticut, was arrested on charges that he allegedly misappropriated nearly $20 million in a Ponzi scheme. The scheme involved investments into a hedge fund that was supposedly purchasing securities. Rhodes allegedly defrauded 25 investors and falsified an investor account statement in at least one instance.

Ernie Julius Romer III, 57, was accused of one additional charge in connection with an alleged $3 million Ponzi scheme. Romer has been in jail for 13 months, unable to afford the $1 million bond. He has pleaded no contest and is awaiting sentencing.

Carl Frederick Sealey, 43, of New Jersey, was sentenced to 78 months in prison in connection with a Ponzi scheme that defrauded about 20 investors out of $1.6 million. Sealey is the ex-chairman and CEO of Global Standard Industries and SEK Industries and misrepresented to investors that their investments were risk free and were earn 10% interest in 90 days. He falsely claimed that his equity-investment firms had almost $50 billion in assets. Instead, Sealey spent the investors’ funds on his personal expenses for things like spa treatments, jewelry and helicopter-flying lessons and rides.

Karl James Stehlin aka Carl Davis, 63, was sentenced to 10 years in prison in connection with a $10 million scheme that he ran through Marble Bridge Funding Group. Stehin would fake invoices to companies that offered factoring services.

Carlos Uresti, 54, and Stanley Bates, 46, were charged by the SEC in connection with an alleged $11 million oil and gas fracking Ponzi scheme. Uresti, who had been found guilty by a jury on criminal charges dropped his appeal of his conviction and 12 year sentence. He also surrendered his license to practice law and resigned from the Texas Senate.

Frederick Alan Voight, 61, was charged in Nebraska in connection with an alleged $40.9 million Ponzi scheme. Voight ran the scheme through several entities, including F.A. Voight & Associates and Daystar Funding. He represented to investors that he provided financing to companies to take them through ‘commercialization to profitability.” Voight allegedly raised about $76 million from 608 investors, but only about $22 million of the funds were loaned.

Susan Margaret Werth, 57, of San Diego, California, was charged and pleaded not guilty in connection with an alleged Ponzi scheme that raised approximately $26 million. Werth ran the scheme through Commercial Exchange Solutions and Exchange Solutions Company and falsely claimed that she would use investor funds for short-term construction loans. She represented that the investments were 100% guaranteed and promised rates of returns of at least 15% on 30 to 90-day terms. Werth allegedly spent $2 million of the funds to fund her lifestyle.

Lucita “Lu” A. Zamoras, 55, of Illinois, was charged in connection with an alleged $3.5 million Ponzi scheme that defrauded at least 12 victims. Zamoras is a financial advisor who alleged preyed upon elderly Filipino families by falsely promising them safe, low-risk investments in retirement products and custom insurance services. Zamoras instead used their money to feed her gambling habit and pay her personal expenses. Zamoras operated through several businesses, including First Fidelity Tax, JQH Ventures, and Cornerstone Home Solutions.

INTERNATIONAL PONZI SCHEME NEWS

Australia

The Berlin Group, an MLM cryptocurrency scheme, is believed to be a Ponzi scheme. Joachim Pydde is the director of The Berlin Group. Laurie Suarez aka Lorenzo Suarez is the Executive Operations Manager and is a ‘convicted fraudster.’ Peter Ohanyan, the company’s Chief Marketing Officer, was promoting 3T Networks, an illegal unregistered securities offering.

Belgium

The Financial Services and Markets Authority updated its fraudulent crypto site with 21 new crypto sites that have been blacklisted. Five of those sites are no longer available, where 16 others are still operational. One of them changed its business model to video on demand services after being blacklisted.

China

More than 20 suspects were detained in connection with an alleged $14 billion Ponzi scheme called Data Tycoon involving latex bedding. Instead of selling latex products, however, they sold financial products to investors who were encouraged to bring in new investors. Investors became members of the DT Group, and over 1 million-member accounts were opened from June 2016 to August 2018.

England

Victoria Smith, 29, was sentenced to 4½ years in jail in connection with a Ponzi scheme. Smith defrauded investors by offering preferential rates in fake foreign currency schemes.

India

Asif Ashrak Malkani was arrested after evading authorities for 9 months. Malkani is the founder of Kashh Coin and defrauded investors out of hundreds of thousands of dollars. Malkani was gearing up to launch a new scheme called V-Tube.

Aalima Nowhera Shaikh, 45, the chairperson of Heera Group, was arrested on charges that investors were defrauded in Shaikh’s “Halal investment programmes.” Shaikh is accused of defrauding 10,000 investors out of Rs 500 crore.

New Zealand

Kelvin Clive Wood, 69, was charged with running a Ponzi scheme through a foreign exchange brokerage and trading business. The scheme allegedly involved 18 investors who lost $7 million. Wood entered a no plea.

Nigeria

Lizzy Efah was arrested while trying to flee from Nigeria. She has been accused of operating a Ponzi scheme named Golden Achievers, which is a Swiss gold scheme.

Poland

The DasCoin scheme is being criminally investigated. Polish authorities seized over $11.6 million from what is believed to be a Ponzi scheme involving cryptocurrency. Das Coin was a cryptocurrency launched to raise funds for a company known as Net Leaders.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

An appellate court upheld a lower court’s rejection of a stipulated amount of restitution pursuant to a plea agreement by Dean Hamilton. Hamilton had pleaded guilty to one count of securities fraud in connection with a Ponzi scheme run through Galileo Financial LLC. He had sold securities to four investors who lost a total of about $512,000. The stipulation for restitution provided that he pay $38,000 to victims at the rate of $500 per month. The court disagreed to ordered restitution in the amount of $382,085, which order was upheld on appeal. State of Utah v. Hamilton, 2018 UT App 202 (Oct. 25, 2018).

The bankruptcy judge approved the plan of liquidation for the Woodbridge Group of Companies, LLC. Woodbridge was a high-end real estate developer and operated through at least 279 companies. The scheme involved about $1 billion.  The liquidation plan was approved over the objection of some of the creditors. 

Sunday, September 30, 2018

September 2018 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for September 2018. The reported stories reflect at least 8 new Ponzi schemes worldwide; about 38 years of newly imposed sentences for people involved in Ponzi schemes; 4 guilty pleas or convictions, and an average age of approximately 47 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Stanley Bates was sentenced to 15 years in prison in connection with the Ponzi scheme run through FourWinds Logistics with co-conspirator state senator Carlos Uresti. Bates had previously pleaded guilty. Uresti was sentenced to 12 years in prison earlier in the year, and Gary Cain was sentenced to 5 years in prison. All three men were ordered to pay back their victims more than $6.3 million.

Bitconnect, Magma Foundation and Pension Rewards Platform were the subject of cease and desist orders sought by the North Dakota Securities Commissioner. The action is part of an initiative known as “Operation Crypto Sweep,” which is a multi-jurisdiction investigation and implementation effort involving about forty U.S. and Canadian security regulators. Bitconnect has previously received such orders from regulatory authorities in Colorado, North Carolina and Texas.

Wade T. Caughman, 51, of South Carolina, pleaded guilty to charges that he ran a Ponzi scheme. Caughman told investors that he had lucrative auto sales leads from local credit unions and that investors would make $800 in interest for money loaned to finance the purchase of cars that were sold to credit union members. He created fictitious auto loan and purchase paperwork to persuade investors.

Homero Joshua Garza, 33, the former CEO of GAW Miners, was sentenced to 21 months in prison and ordered to pay $9.2 million in restitution in connection with the cryptocurrency scheme involving PayCoin. GAW Miners had guaranteed investors a $20 floor price for PayCoin, but the highest price paid was $15.92. GAW, short for “Geniuses at Work,” also ran its own cloud-based wallet service (Paybase), cloud-based mining service (ZenMiner), and online discussion board (HashTalk).

Jeffrey Goldman, 52, and Christopher Eikenberry, 49, of Michigan, were charged on allegations that they were running a day-trading scheme through Nonko Trading that defrauded customers out of at least $1.4 million. Nonko targeting inexperienced traders and provided them with accounts that merely simulate actual trading. The customers’ deposits were used for personal expenses and to make Ponzi payments. The SEC had previously charged four other individuals and two entities in connection with the fraud. Naris Chamroonrat and Adam Plumer have settled the charges. Criminal charges against the other two, Yaniv Avnon and Ran Armon, are pending.

James E. Hocker, 48, was criminally charged on allegations that he was running a Ponzi scheme involving about $1.5 million. He had previously been sued by the SEC in connection with the scheme run through James E. Hocker & Associates involving the sale of insurance products and annuities. Hocker allegedly defrauded about 25 individuals and promised them returns of between 10% and 30%.

Claud R. “Rick” Koerber was found guilty on charges relating to one of the biggest Ponzi schemes in Utah history. Koerber raised almost $100 million in connection with the fraudulent real estate scheme that he ran through his companies, Founders Capital, Franklin Squires Investments and Franklin Squires Cos

Nemelee Liwanag Jiao, 47, was sentenced to 8 years in prison for running a Ponzi scheme that defrauded 39 investors out of about $1.9 million. The scheme victimized Filipino, African, Indian and Korean fellow medical workers. Jiao sent funds to the Philippines and bought luxury items for herself.

Kevin B. Merrill, 53, Jay B. Ledford, 54, and Cameron R. Jeziersky, 28, were indicted on charges relating to an alleged $364 million Ponzi scheme in Maryland that defrauded at least 400 victims. The three individuals invited investors to buy consumer debt portfolios from which they would profit from debt payments and flipping of the portfolios. The three men and their five companies, including Global Credit Recovery LLC, Delmarva Capital LLC and Rhino Capital Holdings LLC, were also named in a lawsuit filed by the SEC. Prosecutors allege that about $197 million was repaid to investors and about $148 million is still owed to investors.

James Bernard Moore, 57, was arrested in connection with a $17 million Ponzi scheme. Moore and his company, Universal Voicetech, Inc., were also named in a lawsuit filed by the SEC accusing them of selling fraudulent investments. The scheme related to misconduct by Renwick Haddow, 50, and his company Bar Works, Inc. Moore and his network of sales agents raised over $5 million from at least 100 investors. 

LaVerne “Vern” Moter, 50, of Colorado pleaded guilty to charges that he was running a $2.6 million real estate Ponzi scheme. Moter was supposedly buying undeveloped land in Arizona through his company, American Undeveloped Real Estate Fund. Investors were promised interest between 5% and 12% per year.

Jonny Ngo, Donato “Mick” Baca Jr., and NL Technology, LLC were sued by the SEC on allegations that they were running a Ponzi scheme. One day later, Ngo and NL Technology entered into a consent judgment agreeing to pay back $4.5 million, without admitting or denying the allegations in the complaint. The SEC alleged classic Ponzi scheme factors, such as false promises that funds would be used in a wholesale electronics import business; false promises of security; exorbitant returns for short periods of time; no meaningful legitimate business activity; and the use of new money coming in to pay prior investors and themselves, rather than for the alleged business. The scheme defrauded over 350 investors and had raised $61 million by promising returns of 5% to 15% every two weeks to 45 days.

Perry Santillo, 38, was previously charged by the SEC with running a Ponzi scheme that defrauded 637 investors and raised $102 million. Santillo, along with Christopher Parris, 38, Paul Larocco, and John Piccarreto, are accused of running the fraudulent scheme. The FBI is actively interviewing victims.

Michael Scronic, 46, of New York, was sentenced to 8 years in prison and ordered to pay more than $22 million in restitution in connection with a Ponzi scheme that defrauded 45 people out of $22 million. Investors were promised returns in the Scronic Macro Fund. Scronic had previously pleaded admitted to the scheme.

Mark S. Scott, a former partner at Lock Lorde and founder of MSS International Consultants Ltd., a private equity fund headquartered in the British Virgin Islands, was arrested and pleaded not guilty to charges that he helped launder $400 million in connection with an international cryptocurrency Ponzi scheme known as OneCoin.

Roger Dale Williams, a preacher in Kentucky, was sentenced to 63 months in prison and ordered to pay about $1.4 million in restitution after pleading guilty to running a fraudulent investment scheme that netted him $2 million. The scheme was run through Dash Holdings and more than 50 people were defrauded. Williams offered investments in stock purchases, start-ups, and bonds, and he provided investors with false IRS forms.

Michael Wright, 42, pleaded guilty to charges that he, along with co-defendant Craig Carton, ran a ticket Ponzi scheme. They were accused of soliciting investors to fund a business of buying and reselling blocks of tickets to music, entertainment and sporting events. Joseph Meli is currently serving 6½ years in prison for the scheme. Carton has pleaded not guilty.

INTERNATIONAL PONZI SCHEME NEWS 

China

Ten people were sentenced in connection with an $8 billion Ponzi scheme. Xu Qin, a founder of Zhongjin Capital, was given a life sentence, and nine others were given sentences ranging from five to 12 years. 

India

Prakash Uttekar, 58, and Venkatraman Natrajan, 60, were arrested in connection with the Royal Twinkle Star Club scheme. The company’s managing director, Omprakash Goenka, was arrested earlier this year. About 18,000 investors are believed to have been defrauded.

Vivek Bhardwaj, the brother of Gain Bitcoin founder Amit Bhardwaj, was brought in for questioning about the scheme. 

Authorities in Arizona and Illinois wrote to India’s Criminal Investigation Department seeking assistance in recovering laundered assets for victims in connection with the Bitconnect cryptocurrency scheme. The scheme is believed to have defrauded investors out of $5.66 billion by promising them 800% returns per annum. Indian authorities are investigating whether they have authority to seize assets.

Nigeria

Micheno Multipurpose Cooperative Society is reportedly running a Ponzi scheme and has stopped paying investors. 

Philippines

Marcelino Ramojal, 51, and his son, Tishiri, 28, were arrested in connection with an alleged Ponzi scheme run through I-SURE and Maximum Care Solutions. Authorities are still looking for Marcelino’s wife, Flordefe, and another son, Cliff. 

Russia

Authorities found that a group of companies operating under the name Cashberry were running a Ponzi scheme.

South Africa

Jaco Jordan, 52, was charged on allegations that he ran a Ponzi scheme that defrauded about 120 victims by convincing them to invest half of their pension money into his scheme. He promised them they would double their money through their investments.

Thailand

Victims of an alleged Ponzi scheme run by Khon Kaen, 46, sought to have her arrested. The scheme involved 300 investors who were promised large returns but were cheated out of 40 million baht.

Uganda

Police arrested Simon Musinguzi and Daniel Kalyango in connection with an alleged scheme run by Adsan Enterprises that allegedly defrauded investors out of Shs812. The scheme involved cryptocurrency ventures. Adsan had started as a company that supplied chicks to poultry farmers at a subsidized price but later began channeling money into cryptocurrency.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

A group of 836 foreign investors sued People’s United Bank in connection with the Jay Peak Ski Resort Ponzi scheme. The investors allege that the bank misappropriated their funds.

Investors are seeking to certify a class in a case against GAW Miners LLC and ZenMiner LLC in an alleged cryptocurrency Ponzi scheme involving the sale of “miners” of virtual currency. 

Notice of a previously sealed lawsuit brought by the SEC against 1 Global Capital LLC and its former CEO, Carl Ruderman, was made public. The lawsuit accused them of fraudulently raising more than $287 million and misappropriating at least $35 million of that. 

Proskauer Rose agreed to pay $63 million to settle claims brought by investors in the R. Allen Stanford Ponzi scheme. 

A court ruled that U.S. securities laws can be used to prosecute fraud cases relating to cryptocurrency offerings. The decision relates to charges that Maksim Zaslavskiy fraudulently took at least $300,000 from investors in a cryptocurrency scheme called REcoin, which he claimed was backed by real estate, and another cryptocurrency called Diamond, which he claimed was backed by diamonds. 

Friday, August 31, 2018

August 2018 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for August 2018. The reported stories reflect at least 7 new Ponzi schemes worldwide; about 20 years of newly imposed sentences for people involved in Ponzi schemes; 2 guilty pleas or convictions, and an average age of approximately 53 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Arthur Lamar Adams and Madison Timber Properties LLC were the subject of an SEC complaint accusing them of running a multi-million dollar Ponzi scheme. Adams had previously pleaded guilty to charges brought in Mississippi. Investors were told their money would be used by MT Properties to acquire timber-harvesting rights from landowners. Investors were promised returns of 12% to 15%. More than $100 million was invested by more than 250 investors. Adams’ sentencing in his criminal case has been delayed until October.

Michael D’Alessio, 52, was arrested on charges relating to an alleged Ponzi scheme in New York. Alessio sold investments for real estate projects through his firm, Michael Paul Enterprises. Instead of generating promised returns, however, Alessio use the funds to pay his own debt, to gamble and for other personal expenses.

Jerome H. Cohen, 63, and his son, Shaun D. Cohen, 39, were sued by the SEC in connection with an alleged $135 million Ponzi scheme run through Equitybuild Inc. and Equity Build Finance. The scheme allegedly defrauded about 900 investors and promised returns of 12% to 20% from a real estate scheme that supposedly identified undervalued property. EquityBuild is a Florida corporation with an office in Chicago and solicited funds from investments in Chicago real estate projects. 

John “Jack” William Cranney, 77, of Texas was sentenced to 5 years in prison in Massachusetts and ordered to pay more than $5.5 million in restitution in connection with a $6 million scheme that defrauded 15 investors. Cranney created shell companies and convinced victims to transfer their IRA and 401k retirement funds to him, including Employee Stock Ownership Plan. He spent the money on personal expenses and to prop up his failing nutrition products distributorship.

Randall Alan Finer, 55, pleaded guilty to running a Ponzi scheme in Iowa. Finer raised $887,700 from investors for his day-trading operation but used more than half the money on personal expenses and to pay promised returns to earlier investors.

Gilbert Fluetsch, 52, was barred by the SEC from the securities industry. Fluetsch was the chief operating officer of California-based Hoplon Financial Group and was alleged to have assisted Daniel B. Vazquez Sr., the company’s owner, in creating the New Economic Opportunities Fund I, or NEON. The Fund was to pool investor funds to purchase and flip real estate. They sold membership units in the fund totaling $2.18 million to 27 investors. The funds were misused on unrelated business or personal expenses.

Michael James Frew, 70, was indicted in Nevada on charges that he ran a real-estate related Ponzi scheme. Investors understood that Frew would invest their funds in real estate in the United States and abroad, but Frew instead spent the money on personal expenses, to speculate in the stock market, and to repay earlier victims a portion of their investment.

Evan Greebel, 45, was sentenced to 18 months in prison and ordered to pay $10 million in restitution for his role in the scheme run by Martin “Pharma Bro” Shrekli. Shrekli was previously found guilty of securities fraud for running a Ponzi scheme involving his biotechnology company Retrophin Inc. Greebel was outside counsel for Retrophin and was found guilty of scheming with Shkreli to commit fraud.

Barry M. Kornfeld, Ferne Kornfeld, Lynette M. Robbins, Andrew G. Costa, Albert D. Klager and their companies, including Knowles Systems Inc., were sued by the SEC and accused of selling retail investors more than $243 million in unregistered securities in Woodbridge Group of Companies LLC to more than 1,600 investors. Woodbridge was allegedly running a $1.2 billion Ponzi scheme. Robbins was the highest-earning external agent of Woodbridge, receiving at least $8.1 million in commissions.

Hector May, 77, was accused of running a Ponzi scheme that stole millions of dollars from a company’s pension plans. May was a financial adviser whose advisory firm, Securities America, operated as Executive Compensation Planners.

Edward Lee Moody Jr., 47, and his Virginia-based company, CM Capital Management LLC, were sued by the SEC, claiming that Moody embezzled over $2 million and paid out $1.4 million in a Ponzi-like fashion. 

John K. Moore aka Kevin Moore was found guilty of running a Ponzi scheme in Montana. Moore had been charged with defrauding 36 investors out of $2.7 million through his mining company called Big Sky Mineral Resources and a fine art investment company called Glacier Gala. Moore had previously been convicted in the late 1980s for defrauding a victim out of $75,000 in a gold coin scheme.

Daniel Rivera, 48, was indicted in New Jersey on charges that he ran a scheme through a company called Robbins Lane Properties, Inc. Rivera, a financial advisor, misrepresented that the company employed real estate professionals who would use the investments to fund real estate ventures. The investors were promised monthly returns based on “secure real estate investments in the company’s portfolio.” Rivera spent the money on personal expenses and his child’s tuition and sorority fees.

Brandon Walton Stewart, 33, pleaded guilty to charges that he ran a $13.5 million Ponzi scheme. Stewart was arrested in Dallas and extradited back to Orange County, California. He had promised investors that he would invest their money in stocks such as Facebook, but he instead spent the money on himself.

Cory Ryan Williams, 40, of Arizona, was sentenced to 7 years in prison for running a Ponzi scheme that brought in about $13 million from about 50 victims. Williams promised investors returns of 5% weekly but he lost more than $8 million in trading stock futures. Williams and his company, Williams Advisory Group, were previously charged by the CFTC with running a commodity futures fraud, promising to invest funds using his expertise and based on his supposed profitable past.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Authorities have alleged that Todd Norman John Bezzasso, Bezzaz Holdings Group Ltd., Nexus Global Trading Ltd., Wei Kai Liao aka Kevin Liao, and Florino Corsi, were running a fraudulent investment scheme. Bezzasso was the sole director and officer of Bezzaz and Nexus, Liao was a finder for Bezzaz, and Corsi was a finder for Bezzaz and Nexus. About $5 million was raised from about 85 investors who were promised monthly returns in various investments. The returns promised ranged from 5% to 30% for periods of one to 6 months.

China

Linlijia Commerce and Trade wound up all of its stores when its sole investor, Shanlin Shanghai Financial Information Service, was busted for running a Ponzi scheme. Shanlin was running a peer-to-peer lending operation and when its accounts were frozen it was no longer able to inject cash into Linlijia’s accounts.

England

Freddy David, 49, was sentenced to 6 years in prison. He admitted to stealing about $19 million from about 55 people in a Ponzi scheme by selling them fake investments through HBFS Financial Services, a wealth management company. David targeted mostly Jewish victims from his synagogue. The rabbi of the congregation apologized for calling David up to read a blessing, not knowing that David had defrauded members of the congregation. David lost much of the money on gambling websites.

India

Ganesh Hazare, the director of Atharva4U Infra and Agro Pvt Ltd., and Shivaji Nikale, the managing director, were arrested in connection with an alleged Ponzi scheme run through the companies. The scheme promised investors that they would double their money in a period of 5 years, triple their money in 7 years, and make 4 times their money in 10 years. 

The Ponzi scheme run through GainBitcoin saw two more suspects arrested. The scheme defrauded victims out of $150 million. The individuals had close ties to Amit Bhardway, the individual who started GainBitcoin.

Divyesh Darji was arrested upon his arrival from Dubai for his role in the Bitconnect scheme. Darji is the Asia head of the scheme which was shut down by regulators in Texas and North Carolina.

Gardas Ramesh and four others were arrested at the premises of GRM Estates on charges that they defrauded over 1,200 investors out of $1.43 million in a Coinx Trading cryptocurrency scheme.

Taiwan

Thirteen executives and employees of Maxim Trader Group were found guilty of defrauding investors out of about $453 million. The firm was supposedly engaged in foreign exchange trading and other investment opportunities and promised investors between 3% and 8% per month, and as much as 98% per year. About 50,000 people from Taiwan, Southeast Asia, Hong Kong, China, Japan, South Korea and Australia invested with the company before it collapsed in 2015. Chang Chin-su, the chief executive, was sentenced to 11 years in prison, and Chia Hsiang-chieh, the chief assistant, was sentenced to 9 years. Chang’s sister, Chang Mu-tan, was sentenced to 5 years. Maxim had claimed that it was an affiliate of Royale Globe Holding, a NASDAQ-listed company. Malaysian authorities earlier this year indicted Andrew Lim Ann Hoe, the chief executive of Maxim Capital, and company executives Chin Ming Kam and Goh Seow Mooi on charges relating to a scheme known as the Maxim Trader Compensation Plan. Malaysian investigators estimated that 50,000 investors around Asia had lost a total of US $5 billion.

Thailand

Officials in Thailand are seeking the extradition of four Singapore citizens believed to be involved in the Eagle Gates Group Ponzi scheme. The scheme has resulted in losses of about $9.8 million and 250 Thai and foreign investors. U.S. national, Derrick Matthew Keller, has been detained as an alleged accomplice and has admitted that he was an actor that was hired by the CEO of Eagle Gates to deceive investors in China, Hong Kong, Macau, Malaysia and Thailand.

Uganda

Charles Nwabuikwu, 44, was arrested on charges that he ran a Ponzi scheme through Development Channel that defrauded Ugandans. The company described itself as “the world’s most comprehensive platform for increasing access to basis development needs between the developed and under developed countries and communities.” 

The Bank of Uganda released a statement cautioning the public against investing in businesses which sound too good to be true. The Bank stated that if a business guarantees high returns with little risks of losing the investment, it is false. 

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

City National Bank agreed to pay $33 million to settle claims that it aided and abetted a Ponzi scheme run by Nationwide Automated Systems Inc. The scheme involved the sale of ATM machines to investors who were promised $.50 from each ATM transaction.

About $16 million is being distributed in the Thomas Petters Ponzi scheme case.  The payments will go to about 360 investors.

Proskauer Rose LLP and the receiver in the R. Allen Stanford $7 billion Ponzi scheme reached a $63 million settlement of claims against the law firm in connection with the scheme. The firm admits no wrongdoing in the settlement.

A putative class of investors settled with United Development Funding IV to resolve claims that the company and covered up its “Ponzi-like” nature.  The settlement is for $13.5 million.