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

Kathy is a senior business trial attorney with more than 27 years experience prosecuting and defending claims for 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 an expert on 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

Wednesday, July 31, 2019

July 2019 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for July 2019. The reported stories reflect at least 15 new Ponzi schemes worldwide; at least 2 guilty pleas, over 6 years of newly imposed sentences for people involved in Ponzi schemes; 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.
 
Jose Angel Aman, Harold Seigel and his son Jonathan Seigel, were sued by a group of Venezuelan nationals alleging that they were lured into a $30 million Ponzi scheme with promises of returns on investments in diamond-backed cryptocurrency, Argyle Coin. The scheme was run through two diamond companies, Natural Diamonds and Eagle Financial, and an associated cryptocurrency business. Over 300 investors were defrauded. The Seigels deny any wrongdoing.

Monica Brady, 44, of Rhode Island, pleaded guilty to charges relating to a $10 million real estate Ponzi scheme that she ran through MNB. Brady claimed to be overseeing renovations on foreclosed properties and she promised investors returns from the profits from the sale of the properties. Investors were promised returns of 50% of the profits from the projects.

Joseph Bernard Charde, 72, and Allen Roy Duquet, 68, of Florida were arrested in connection with an alleged real estate Ponzi scheme that defrauded 26 victims out of $6 million. The scheme was run through Oneir Sales and Rentals LLC and an investment program called The Commission Resource Program. The dollar amount allegedly stolen is more than $6 million.

Natalie Cochran was accused of running an investment fraud with her late husband, Michael Cochran. The alleged scheme was run through Tactical Solutions Group and Technology Management Systems, which were government contractors. Cochran filed bankruptcy following the fraud charges.

Myles Hannigan, 48, was charged with federal tax crimes in connection with an alleged Ponzi scheme run through Payroll Professionals, Inc. The company is a third-party payroll processor that assists clients by issuing payroll checks and forwarding tax payments to taxing agencies.
 
Hunter Hanson, 22, of North Dakota, pleaded guilty to charges relating to his grain business that was alleged to be a Ponzi scheme. The plea deal calls for Hanson to forfeit his assets and pay $11.4 million in restitution.

David Kaplan, 52, and his companies, Synchronized Organizational Solutions International Ltd. (SOSI), Synchronized Organizational Solutions LLC (SOS), and Manna International Enterprises Ltd., were charged in connection with an alleged Ponzi scheme. Kaplan allegedly used his role as an attorney to defraud investors in a scheme that netted more than $12 million from investors. Investors were promised returns of 10% per month.

Bernard Madoff, 81, asked President Trump to reduce his 105-year prison sentence. Madoff asked that his sentence be commuted and that he be released – a request that the prosecutor called “the very definition of chutzpah.”

William J. Milles and Donald J. Lutzko, co-founders of Capital Energy Group LLC, were sued by the SEC on allegations that they were running a $3.9 million Ponzi scheme. The scheme allegedly offered high returns on oil and gas offerings, guaranteeing 237% or 363%. The scheme allegedly defrauded approximately 70 investors.

Clayton Morris, a former co-host on Fox News’ Fox & Friends, and his wife, Natalie Morris, were accused of defrauding investors through their company, Morris Invests. They have denied the claims and moved to Portugal. Morris was a part owner of Oceanpointe, a company that sold turnkey landlord services in Indianapolis to investors. Morris and his partner, Bert Whalen, have both been sued and accused of doing substandard repairs to properties.
 
Mark Nordlicht and David Levy were convicted of fraud in connection with the Platinum Partners scheme.  They had been accused of defrauding investors in Black Elk Energy, an oil company that was one of Platinum’s largest assets.

Paul Andrews Rinfret, 70, was arrested in connection with an alleged $19 million Ponzi scheme. Rinfret allegedly ran the scheme through his investment fund, Plandome Partners LLC.

Landon M. Smith, 29, of Utah was charged by the SEC was running a $2.4 million Ponzi scheme through J&L Real Estate. The scheme promised returns of up to 100% on investments that would be used as “earnest money” down payments for real estate that Smith would buy and then sell. The scheme defrauded 50 investors.

Henry Wieniewitz, III and his Tennessee company, Wieniewitz Financial, were charged by the SEC with unlawfully offering and selling securities of Woodbridge Group of Companies LLC and 1 Global Capital. Woodbridge was previously charged by the SEC with operating a $1.2 billion Ponzi scheme. Wieniewitz and his company are alleged to have sold securities to more than 630 investors.

INTERNATIONAL PONZI SCHEME NEWS
 
Australia

An alleged Ponzi scheme defrauded victims through a website called Coinexx.org. The scheme promised returns of up to 15% weekly.
 
Richard Philip Lambe was banned from providing financial services for 3 years following his involvement in a $120 million Ponzi scheme run by Veronica Macpherson that defrauded nearly 2,000 people. Lambe was found to have failed in his duty to supervise Macro Group Company 511 GTN and Macpherson as director of Anquan Securities and Investment.

Kelvin Clive Wood was sentenced to 6 years and 3 months in prison for a Ponzi scheme run through his foreign exchange brokerage. The scheme defrauded 18 investors and more than $7 million was lost in the scheme.

Canada

John James Illidge, 66, and Vincent Phillips, 74 were charged in connection with an alleged $1 million Ponzi scheme. Illidge represented that he was an investor for different companies.

China

Justin Sun, the CEO of Tron, aka Wave Field, is accused of running a Ponzi scheme that defrauded thousands of investors out of at least $30 million. The scheme was run through Wave Field Super Community, and victims invested in Tron cryptocurrency, TRX.

England

Authorities seized $4.24 million from Samuel Golding, 42, and Shantell Deacon, 40, in connection with a China trade investment Ponzi scheme. The scheme was run through Digital Wealth and Outsourcing Express and defrauded 1,000 investors.

India

Sandeep Singh Dua was arrested in connection with a cryptocurrency scam involving Kashhcoin.
 
Vijay Prajapati, Dhiraj Patel, Kamruddin Syed, and Ashiq Shaikh, the alleged creators of the cryptocurrency, KBC Coin, were arrested.

Rajesh Khantwal was arrested on charges that he was running a scheme through Maple Innovative Promoters and MIP Bikes. Over 5,000 investors put money into the motorcycle sharing aggregator alleged Ponzi scheme.

Malta

Authorities have issued a warning that Emirate Coin Tech is not licensed or registered and has no authority to provide any investment, crypto or another type of financial services.

Philippines

The SEC ordered Alabel Maasim Mining (ALMANICO) Corp. and Alabel-Maasim Credit Corp. (ALAMCCO) to stop operations without a license.  The SEC alleged that the companies were running a Ponzi scheme that promised returns of 35% per month.

South Africa

A bitcoin scheme allegedly defrauded thousands of investors through a company called Bitcoin Wallet. The scheme promised returns of 100% in 15 days. Investors set fire to the home of Sphelele “Sgumza” Mbatha following the collapse of the scheme.

South Korea

The crypto firm, PlusToken, was accused of running a Ponzi scheme that stole $3 billion from customers. PlusToken had 3 million users and expected to have 10 million users by the end of 2019. The scheme promised returns of 6% to 18% per month.

Authorities believe that about 2.7 trillion won ($2.3 billion) has been lost to crimes in cryptocurrency in the last two years.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

Deloitte, EisnerAmper, Sidley Austin, TD Ameritrade, Integrity Bank & Trust of Colorado, Duff & Phelps agreed to pay $234.6 million for allegedly enabling the Ponzi scheme run by Aequitas Capital Management.

Kingate Management Ltd. agreed to pay back $860 million to the Bernard Madoff estate.

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