Posted by Kathy Bazoian Phelps
Below is a summary of the activity reported for April 2019. The reported stories reflect at least 7 new Ponzi schemes worldwide; at least 4 guilty pleas, over 53 years of newly imposed sentences for people involved in Ponzi schemes; and an average age of approximately 46 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
Jason E. Adkins, 40, of Ohio, pleaded guilty to charges that he orchestrated a $50 million Ponzi scheme that defrauded at least 46 investors. Adkins promised returns of 15% to 20% from a supposed business that would buy over-sized tires commonly known as off-the-road-tires, that would then be re-sold to a buyer at a much higher price. He ran the scheme through his two companies, Landash Corp. and Midwest Coal LLC.
Mark Alan Blankespoor, 49, of Iowa, was charged in connection with an alleged $15 million Ponzi scheme. The scheme allegedly defrauded at least 150 investors by promising 40% returns in the development of “medically oriented gyms.” Blankenspoor is the owner of Blankenspoor Consulting of Pella. His lawyer states that Blankespoor is a “respected physical therapist and certified health coach.” Blankespoor has pleaded not guilty to the charges.
Monique Brady, 44, was charged on accusations that she ran a $4.4 million Ponzi-like investment scheme that involved foreclosed properties. Brady defrauded 32 investors who invested $10 million based on misrepresentations that she was overseeing major renovations at the properties which would generate profits. Brady owned MNB LLC, which did maintenance and upkeep for the home-loan providers on the foreclosed properties.
Angel Bronsgeest, 55, of California, was sentenced to 33 months in prison, 3 years under supervised release and was ordered to pay $2.5 million in restitution for her role in a Ponzi scheme that defrauded about 60 victims. The scheme was orchestrated by Shawn P. Watkins, 49, who conducted monthly real estate seminars to solicit investments into his company, The Equity Growth Group. Investors were promised returns from the supposed acquisition and repair of properties and bridge loans.
Antonio Carlos De Godoy Buzaneli, 57, was sentenced to 20 years in prison for his role in a $150 million investment fraud scheme that defrauded investors in Minnesota. He pleaded guilty last year, and one of his co-conspirators, Jose Manuel Ordonez Jr., was sentenced to 10 years earlier this year.
Anthony Norman Carta, 57, of Michigan, was accused of running a $300,000 Ponzi-type scheme. He is the owner and operator of Freedom by Faith Ministries and defrauded about 100 people, promising them assistance with short sales, mortgage modifications and other real estate transactions. Carta pleaded no contest.
Craig Carton was sentenced to 3½ years in prison for his role in a fake ticket Ponzi scheme. Carton pleaded for leniency, blaming his actions on “demons” stemming from abuse as a child and a gambling addiction. Michael Wright, 42, of New Jersey, was sentenced to 21 months in prison last month in connection with the ticket selling scheme. Carton raised $2 million from a hedge fund, Brigade Capital, to be invested in tickets, but Wright, a financial manager for the business, diverted funds to pay down his home equity line and to pay Carton’s gambling debts.
Michael J. DaCorta, Joseph S. Anile, II, Raymond P. Montie, III, Francisco "Frank" L. Duran, and John J. Haas, along with Oasis International Group, Limited in Florida, were charged by the CFTC. They were accused of misappropriating more than $47 million from investors in two commodities pools – Oasis Global FX, Limited and Oasis Global FX, SA – that were to trade in retail foreign exchange. The CFTC alleged that they were running a $75 million scheme that resembled the Black Diamond forex scheme from a decade ago. The scheme defrauded 700 investors and the funds were misappropriated or lost in forex trading.
Michael D’Alessio, 53, of New York, was sentenced to 6 years for his role in a $58 million Ponzi scheme. D’Alessio pleaded guilty last year to running the scheme through his real estate development company, Michael Paul Enterprises.
Christopher Dean Dougherty, 46, of California, was arrested on allegations that he ran an investment scheme that defrauded about 50 investors out of $7 million. Dougherty represented that the funds were invested in local businesses, including a 100-acre cattle ranch. Dougherty filed for bankruptcy earlier this month. The SEC also charged Dougherty, alleging that he and his firm, C&D Professionals, defrauded clients who were mostly district employees, hospital employees, veterans and neighbors.
Khemraj Dave Hardat, 50, pleaded guilty to charges that he ran a $5 million Ponzi scheme. Hardat posed as a beverage entrepreneur and misrepresented to at least one investor that Steph Curry would be endorsing one of the beverage products. The scheme defrauded at least 7 victims out of $5 million.
Thomas Huling, of Rhode Island, was indicted on charges relating to an alleged $14 million Ponzi scheme in which Huling posed as an investment manager. Over a 10-year period, Huling allegedly moved money between 50 different bank accounts under 8 names. Huling used several different schemes, including a supposed investment in technology to reduce car admissions, and another with a new internet advertising platform.
Cameron Jezierski, 28, of Texas, pleaded guilty to charges relating to his role in a $360 million Ponzi scheme that defrauded more than 400 investors. The scheme was run by Kevin Merrill, 53, and Jay Ledford, 55. Jezierski assisted by submitting false information on financial statements and setting up fake companies. Jezierski was the COO of Riverwalk Financial Group where he worked under Ledford.
Amanda Knorr, 35, was sentenced to 30 months in prison and ordered to pay $54 million in restitution for her role in the $54 million Ponzi scheme run by Mantria Corp. Knorr co-founded Mantria with Troy Wragg and they raised funds from hundreds of investors to produce a supposed clean energy product called “biochar.”
Thomas Lanzana and his company Blackbox Pulse (Unique Forex), and Nikolay Masanko and his company White Cloud Mountain, were ordered to pay $2.7 million for operating a Ponzi scheme that defrauded more than $700,000 from investors. The scheme involved the fraudulent solicitation of funds into foreign exchange trading pools and other investors. The CFTC had charged the operators in 2017 in connection with the fraud.
Brian Oliver pleaded guilty to charges relating to a $617 million fraud run through Aequitas Capital Management. The SEC sued the company and the top three executives, Oliver, Robert Jesenik, and N. Scott Gillis, in 2016, alleging that they were running a Ponzi-like scheme.
Brent Thomas Sapp, 38, of Virginia, was sentenced to 9 years in prison in connection with a $9 million Ponzi scheme that caused $1.8 million in losses. The scheme was run through Sapp’s company, Novus Properties, which claimed to buy and resell distressed lender-owned properties in D.C., Virginia and Maryland. Sapp never actually closed on a single deal but instead spend the investor funds on golf trips, wealth-building seminars, and a Mercedes.
Robert Shapiro, 61, was arrested on charges that he ran a $1.3 billion Ponzi scheme through Woodbridge Group of Companies LLC. Dane R. Roseman, 35, and Ivan Acevedo, 42, were also arrested and pleaded not guilty. The real estate scheme allegedly defrauded about 10,000 investors by promising them returns in low risk real estate investments.
Junzo Suziki, 70, and his son Paul Suzuki, 40, were extradited to the U.S. from Japan in connection with a fraud run through MRI International, Inc., a Nevada investment company. Co-defendant Edwin Fujinaga, 72, was found guilty in November 2018 in connection with the Ponzi scheme that allegedly owed investors over $1.5 billion.
Eliyahu Weinstein and his company, Pine Projects, were ordered to pay victims $87 million in connection with his Ponzi scheme. Weinstein was sentenced to 264 months in prison in 2014 in connection with a real estate Ponzi scheme that caused $200 million in losses.
Kent Whitney and David Lee Parrish were charged in connection with an alleged Ponzi scheme that defrauded 442 victims in the Vietnamese community out of about $25 million. Whitney and Parrish were pastors who ran The Church for the Healthy Self, supposedly with a mission to promote opportunities for those in need. The SEC has alleged that they promised investors returns of up to 43% guaranteed, but used the money to fund their lavish lifestyles rather than for purposes of legitimate investments.
INTERNATIONAL PONZI SCHEME NEWS
Canada
A class action was certified against Virginia Tan, her husband, Patrick Tan, and her son, Marcus Tan, in connection with a $30 million Ponzi scheme. Tan previously admitted to running a fraudulent scheme. She defrauded 240 investors, promising them returns of 16% and 21%, and ran the money through 6 companies, including Letan Investments Management and Letan 88 Enterprises Inc.
Dubai
Canadian Aziz ‘Com’ Mirza has been accused of running a string of Ponzi schemes targeting Muslims. The majority of the victims belong to a UK-based online community platform called the Muslim Entrepreneur Network (MEN). Mirza allegedly ran the scheme with his brother, Rafaqat “Rocky” Mirza.
Germany
Officials are investigating Dexcar, a car rental company that allegedly ran a Ponzi scheme in Europe. The allegations are that Dexcar cheated several tens of thousands of customers, promising customers they would drive a new car for 24 months for a relatively small down payment. Of 40,000 cars ordered, officials allege that only 500 have been delivered. Dexcar founder and manager, Mario Gai, has denied the allegations.
India
Nicholas Koonis, 38, and Kaloso Cantigioni, 40, were accused of running a Ponzi scheme through Drego Consultants Pvt. Ltd. They allegedly ran several schemes using the name Global Inter Gold (GIG) and promised investors profits. Using a YouTube channel and other social media, they represented the company was a leader in financial security.
Mapple Innovative Promoters (MP) Private Limited was accused of running a Ponzi scheme involving bike taxis. The company offered investors five different plans promising monthly returns and had 12,000 investors. Written complaints were filed against the company’s managing directors, Rajesh Khantwal and Kapil Dhama, director Nitin Tyagi, CEO Sachin Raghuvanshi and managers Shubham Chaudhary, Sandeep Yadav, Pramod Kushwaha and Ajay Pandey.
Kuwait
Abdulaziz Houhou was sentenced to 10 years in prison in connection with a $240 million international Ponzi scheme. The scheme involved real estate deals in New York and other major U.S. cities. Houhou and his companies, including BinHouHou Enterprises HMG Group, bought or brokered houses in struggling neighborhoods. As many as 2,000 investors were promised 15% returns and were defrauded.
Nigeria
Babagana Dalori was arrested in connection with an alleged Ponzi scheme that defrauded 27,400 Nigerians. Dalori was the Chief Executive Officer of Galaxy Transportation and Construction Services Limited which defrauded investors out of N7 billion. The scheme initially promised investors 200% returns which were later reduced to 135%.
Samoa
Samoa’s Central Bank named the Samoa Worship Centre as one of two churches who may be involved in the OneCoin cryptocurrency scheme. Transactions relating to OneCoin had been banned last year due to security concerns, but OneCoin got around the restriction by moving at least $2.3 million through New Zealand-based Samoan churches.
South Korea
Officials arrested suspects known as Lee and Bae in connection with an alleged Ponzi scheme involving the sale of private digital tokens called M-Coins. The scheme involved $18.7 million and defrauded about 56,000 people. The scheme promised that the fake cryptocurrency could lead to profits of about 600%.
NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES
The trustee of Palm Beach Finance Partners L.P. and Palm Beach Finance II L.P. negotiated a $49 million settlement with General Electric Capital Corp. in connection with the Tom Petters Ponzi scheme. The Petters scheme involved fictitious wholesale to retail transactions. The trustee alleged that GE Capital discovered the scheme in 2000 but didn’t tell anyone.
Investors sued Wells Fargo bank, alleging that the bank knew of a real estate investment fraud run through a firm called EquityBuild. EquityBuild was run by Jerome Cohen, 63, and his son Shaun Cohen, and raised at least $135 million from more than 900 investors. The lawsuit claims that Wells Fargo aided the fraud by “financing the interest payments interest payments owed to other investors with new investors’ money, rather than with the income from real estate properties that were supposed to support those returns. Wells Fargo had actual knowledge that it held fiduciary funds in its accounts … and knew that those funds were actively being misused.”
The Fifth Circuit affirmed a lower court decision barring a lawsuit against Greenberg Traurig in connection with the R. Allen Stanford Ponzi scheme. The court found that the doctrine of attorney immunity barred the lawsuit. Troice v. Greenberg, 2019 U.S. App. LEXIS 11230 (5th Cir. Apr. 17, 2019).
