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, August 31, 2020

August 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for August 2020. The reported stories reflect at least 9 new Ponzi schemes worldwide, 2 guilty pleas, 55 years of prison sentences, 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.
   
Clarence Dean Alford, 67, was charged by the SEC for allegedly defrauding investors in a Ponzi scheme run through Allied Energy Services, LLC. The scheme involved at least 100 investors out of about $23 million, promising them returns of 12% to 34% from investments in energy projects.

Banana.Fund was accused of running a cryptocurrency Ponzi scheme by authorities who filed a forfeiture lawsuit. Authorities seized 482 Bitcoin and over $1.72 million. The fund was supposedly a crowdfunding project that would incubate startups by attracting Bitcoin from investors in exchange for shares in the business. Banana.Fund is believed to be operated by British National, Richard Matthew John O’Neill aka Jo Cook.

Victor Lee Farias, 47, of Texas, was accused by the SEC of running a Ponzi scheme. Farias allegedly told investors that their money would be used to purchase aircraft engines and other parts that would then be leased or resold to major airlines. He promised returns of 10% to 12%.

William Neil “Doc” Gallagher, 79, was sentenced to 25 years in prison and ordered to pay more than $10 million in connection with a Ponzi scheme that promised annual returns of 5% to almost 9% to people who invested in securities with him. Gallagher had a Christian radio show called “The Money Physician.” The scheme brought in about $29.2 million from about 60 investors.

Dennis Mbongeni Jali, 35, Arley Ray Johnson, 61, and John Frimpong, 40, were charged by the CFTC with running a $27 million Ponzi scheme through 1st Million LLC, Smart Partners LLC and Access to Assets LLC. The complaint alleges that they fraudulently solicited investors to trade in foreign currency and digital assets such as bitcoin. There are 1,200 investors who believed they held “secure contracts” promising their funds would be held in escrow or trust. The SEC also charged the Maryland-based companies this month. The scheme guaranteed monthly or quarterly returns of around 6% to 42%.

Scott A. Kohn, 65, and Joseph Hipp had more criminal charges filed against them in connection with a $450 million Ponzi scheme run through Future Income Payments LLC. Melanie Jo Schulze-Miller was also charged in connection with the scheme. Initial charges were filed in 2019 in connection with the nationwide scheme that defrauded pension holders and investors.

Jason Kurland, 46, a lawyer from New York, was charged in connection with an alleged Ponzi scheme involving lottery earnings. Kurland calls himself a “lottery lawyer” and promised jackpot winners that he would invest their winnings. Instead, he put their cash into investments run by reputed Genovese crime family soldier Christopher Chierchio, 52. Kurland allegedly received kickbacks for steering the money to Chierchio and his partners. It is believed that $107 million was skimmed from the scam.

Robert J. Jesenik, 61, Brian K. Rice, 54, Nelson Scott Gillis, 67, and Andrew N. MacRitchie, 56, were charged on fraud and money laundering charges in connection with the scheme run through Aequitas Management LLC and related entities. They solicited investments in notes and funds, many of which were purportedly backed by trade receivables in education, health care, transportation and other consumer credit areas.

Peter Madoff, 74, the younger brother of Bernard Madoff, was released from home confinement after having served about nine years of his sentence. Peter Madoff had pleaded guilty to falsifying documents and lying to regulators as part of the Ponzi scheme, and he was sentenced to 10 years in prison. Bernard Madoff, 82, is still serving his 150-year prison sentence.

Anthony Wayne March, of North Carolina, pleaded guilty to charges that he ran a $8.1 million. The scheme was run through Asset Trader and defrauded at least 22 victims. The scheme was to invest in charitable gift annuities and other products, but March instead use the funds to pay for a lavish lifestyle, including a jet, a yacht and property in the Bahamas.

Rodney Scott Phelps, 58, of Kentucky, was sentenced to 9 years in prison and ordered to pay more than $2.4 million in restitution in connection with a Ponzi scheme run with co-defendant, Jason Castenir.  The scheme defrauded 13 victims through a fake investment scheme run through Maverick Asset Management LLC. The scheme promised returns from a supposed opportunity to obtain an oil concession from the government of Belize.

Ariel Quiros, 64, of Florida, pleaded guilty to charges related to the Jay Peak and Burke Mountain ski resorts in Vermont. Quiros and three others were indicted over an investment scheme that brought in $200 million in foreign investors’ money through the EB-5 visa program that allows individuals to obtain a green card and permanent residency in the U.S. The plea agreement provides that Quiros will be sentenced after William Stenger and William Kelly are sentenced, if convicted.

Mark Colin Ramsey, 50, of North Carolina, was sentenced to more than 5 years in prison and ordered to pay close to $1.1 million in restitution for running a fraudulent scheme through at least six different companies, including Hypertrend and Good Living. Investors were given fake investment agreements, fabricated stock certificates, and were guaranteed returns on their investments.

Benjamin Reynolds remains missing, but the CFTC is nevertheless seeking a judgment of about $500 million again him for his role in the alleged Ponzi scheme run through Control-Finance. The CFTC alleges that Reynolds laundered 22,858 Bitcoin worth about $147 million at that time, and that he defrauded about 1,000 customers.

Glyn W. Richards, 56, of New Jersey, was denied his request to be released from prison due to COVID-19 concerns. Richards stole more than $5.8 million in a Ponzi scheme and was sentenced to 30 years in prison. He had falsely claimed to have defense contracts in Iraq with a trucking firm, All Freight Logistics Inc.

Philip Elvin Riehl, 68, of Pennsylvania, was sentenced to 10 years in prison and ordered to pay more than $59 million in restitution. Riehl defrauded his accounting clients and diverted funds to Trickling Springs Creamery LLC, which he owned. The scheme defrauded members of the Mennonite and Amish religious communities.

Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan and Jackie Aguilar were arrested in connection with a scheme run through Airbit.  Airbit was a global cryptocurrency-based Ponzi scheme that was sold as a multi-level marketing club. Victims were told they would earn passive, guaranteed daily returns on any membership purchased.

Dale Tenhulzen, 61, of Wyoming, was charged by the SEC with running a Ponzi scheme through Live Wealthy Institute. The scheme sold about $15 million of unregistered securities in real estate investment funds managed by Equialt LLC.

INTERNATIONAL PONZI SCHEME NEWS

Australia

Graeme Walter Miller was sentenced to 6 years in prison in connection with a $2 million scheme run through CFS Private Wealth Pty Ltd. Miller pleaded guilty to misappropriating $1.865 million of client funds when he served as a financial adviser.

Michael Gu, founder of iProsperity Capital Management Pty Ltd., fled the country amid allegations that he ran a $60 million Ponzi scheme. Reports reveal that $30 million was transferred to Landerer & Company, run by lawyer John Landerer.

Canada

Todd Norman John Bezzasso was ordered to pay $6.3 million in connection with a Ponzi scheme run through Bezzazz Holdings Group Ltd. and Nexus Global Trading Ltd. The scheme raised approximately $5 million from 85 investors. Wei Kai Liao acted as a dealer and advisor and referred 27 investors to the scheme.

Glenda Esteves, 45, and Teddy Lee Esteves, 44, were charged in connection with a Ponzi scheme called Project Cosmo that took in $3.5 million from investors. The scheme targeted the Filipino community. They used companies such as Mac Glamour Ltd., Infy Trading Inc., and B + E Investments to recruit victims into the scheme.

Vernon Fauth, 73, was charged with fraud in connection with an alleged multimillion Ponzi scheme through Espoir Capital. Fauth was banned from the securities industry last year and paid $2.6 million in disgorgement along with other costs. Investor funds were loaned to Fauth and his family members and businesses, including Fauth Financial.

China

Authorities arrested over 100 suspects in connection with the PlusToken cryptocurrency scheme. The scheme promised 9% to 18% returns and defrauded victims out of $5.7 billion. 

Guyana

Cuban national Yuri Garcia Dominguez, 34, and Ateeka Ishmael, 32, were arrested in connection with an alleged Ponzi scheme run through Accelerated Capital Firm Inc.

Singapore

Authorities warned that the investment program known as Building Our Success Stories Network, or BOSS Network, may be a fraudulent Ponzi scheme. The scheme solicits investments from a multi-level marketing program for personal care products.

Zimbabwe

Bevern Capital Private Limited closed its doors and authorities allege that the company was running a $2 million Ponzi scheme. Richard Samunda, a director of the company, was arrested, but Bevern Dzinoenda and Ambrose Chikukwa are still at large.

Phenias Fungai Kamba was charged in connection with an alleged Ponzi scheme run through Kuwait Dinair Digital Marketing that defrauded 22 investors out of $5 million. 

Friday, July 31, 2020

July 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps
Below is a summary of the activity reported for July 2020. The reported stories reflect at least 10 new Ponzi schemes worldwide, 5 guilty pleas, 95 years of prison sentences, and an average age of approximately 54 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
   
Gregory Altieri, 53, the president of LNA Associates, was charged in New York with running a Ponzi scheme that took in between $75 million and $85 million from more than 80 investors. Altieri promised investors a 30% to 70% return within months from nonexistence wholesale jewelry deals where he would supposedly buy jewelry at closeout prices and resell it at a high profit.

Will D. Allen was sentenced to 6 years in prison for his role in a Ponzi scheme that he ran with his business partner, Susan Daub. They ran the scheme through Capital Financial Partners, which offered short-terms loans to professional athletes. The $31 million scheme defrauded investors out of $14 million. 

Silviu Catalin Balaci, 35, pleaded guilty to charges that he conspired to engage in wire fraud and sell unregistered securities linked to Bitclub Network. Balaci had been charged along with co-defendants, Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Abel. Balaci confirmed that the scheme brought in at least $722 million worth of bitcoin from investors and that BitClub never ran the bitcoin mining pools that had been represented to investors. 

Matthew Benjamin, 53, was charged in connection with an alleged scheme that defrauded investors out of $1.525 million. Investors thought they were investing in Benjamin’s cosmetics company, Clear Solutions, even though there was not really a company.

John D. Black aka John Barnes and his entities Financial Tree, Financial Solution Group and New Money Advisors, along with Christopher Mancuso and Joseph Tufo, were charged by the CFTC with operating a binary options and foreign exchange trading scheme. The scheme allegedly defrauded about 90 investors out of $14.5 million. Some investors were promised triple returns on their investment in 4 months, and one person was promised that a $100,000 investment would be quadrupled in three months. The FBI is currently searching for Black, and Mancuso and Tufo were arrested by authorities.

Hal H. Brown, Jr. was sentenced to 17½ years in prison and ordered to pay more than $17 million in restitution for his role in a $22.5 million scheme that defrauded at least 60 investors. He ran the scheme through OODLES, falsely claiming that the company owned hundreds of millions of dollars in intellectual property.

Gina Champion-Cain, 55, of California, pleaded guilty to charges stemming from a $400 million Ponzi scheme. Champion-Cain was the founder of American National Investments, which was charged by the SEC last year relating to an investment program that promised investors returns from loans to people seeking California liquor licenses. Crispin Torres, 53, the former CFO of American National Investments, also pleaded guilty to charges related to the scheme. Champion-Cain used at least $60 million of investor funds to pay expenses at her businesses and to pay for residences in Mission Beach and Rancho Mirage. 

Marvin Courson, and his company Alista Group LLC were charged by the CFTC on allegations that they were running a $900,000 Ponzi scheme involving precious metals. Company employees Christopher Kertatos and Luis Pineda Palacios were also named in the civil enforcement action. 

Christopher Dougherty, 47, was sentenced to 12 years in connection with a $7 million Ponzi scheme that he ran. Dougherty promised returns to his victims from investments in a 100-acre organic cattle ranch and a marijuana growing project.

William Neil “Doc” Gallagher, 79, was found liable for SEC charges related to a $29 million Ponzi scheme. Gallagher is a Christian radio personality and the author of “Jesus Christ, Money Master.”

Savraj “Sam” Gata-Aura, 33, co-conspirator of Renwick Haddow, pleaded guilty to running a workspace rental scheme that defrauded more than 800 investors out of about $36 million. Gata-Aura was sentenced to 4 years in prison and 3 years of supervised release for his role in the Ponzi scheme involving a co-working space company called Bar Works.

Alan Hansen, 49, of California, pleaded guilty to charges related to his role in the Ponzi scheme run by DC Solar. Hansen admitted that he signed fraudulent documents to convince a telecommunications company to invest in DC Solar. The scheme was run by Jeff and Paulette Carpoff, both of whom pleaded guilty earlier this year. Other co-conspirators were Joseph W. Bayliss, 44, Ronald J. Roach, Robert A. Karmann, 53, and Ryan Guidry, 53.

GPB Capital Holdings, which has been accused of running a Ponzi scheme, took between $3 million and $7 million in PPP loans. GPB previously represented that it had reported $1.8 billion from about 2,000 investors, but GPB has not paid redemption since 2018.

David Hu, 62, of International Investment Group, was arrested on charges that he ran a Ponzi scheme involving more than $100 million based on overvalued loans and fake assets. Hu represented that he specialized in trade-finance lending but allegedly mismarked millions of dollars of loan assets to cover up millions in losses. The company agreed to pay $35 million in March to settle fraud charges by the SEC. The SEC has also charged Hu, alleging that he sold at least $60 million in fake trade finance loans to other investors.

Naim Ismail, 60, was arrested on charges that he defrauded investors out of $15 million through a Ponzi scheme that targeted an Afghan Bank. Ismail convinced investors to invest in real estate projects that did not exist and used the money to fund his lavish lifestyle. 

John Law, 41, was indicted on charges that he conspired with Perry Santillo as part of a Ponzi scheme that took in approximately $115 million and resulted in losses to investors of $70.7 million. Santillo was the CEO of First Nationle Solution LLC, and Law offered and sold securities for the company.

Philip Lochmiller, 72, was granted a compassionate release due to his worsening dementia. Lochmiller had defrauded 400 people and was sentenced to 33 years in connection with a scheme run through his home mortgage companies, Valley Mortgage, Inc. and Valley Investments.

Professional Financial Investors Inc. and its primary fund, Professional Investors Security Fund Inc., filed for Chapter 11 bankruptcy protection in California. The corporate restructuring officer identified the Ponzi scheme-like operation that had been run by the late owner, Kenneth Casey.  The filing estimated that there were about 1,000 victims.

Philip Elvin Riehl, 68, of Pennsylvania was sentenced to 10 years in prison for his role in a $60 million Ponzi scheme that targeted members of the Amish and Mennonite communities. Riehl previously pleaded guilty. He operated Trickling Springs Creamery, which he abruptly closed following an FBI investigation.

William “Willie” Rittenbaugh, 49, of Texas was sentenced to 37 years in prison and ordered to pay restitution of $588,500 in connection with a cattle Ponzi scheme. 

Denise Gunderson Rust, 60, the wife of Ponzi schemer Gaylen Dean Rust, 59, pleaded guilty to charges that she held her husband run a $200 million Ponzi scheme. The scheme was run through Rust Rare Coin and involved a fake silver trading program. Gaylen Rust and his son, Joshua Daniel Rust, 37, are charged with fraud and money laundering conspiracy. Denise Rust admitted that she knew that Gaylen Rust’s accounts were not being used for silver trading.

Ronald “Wayne” Snyder, 47, an employee of Texas Express Funding, which is a subsidiary of the Bank of San Antonio, was said to be running a Ponzi-style scheme that involved $13.2 million. No criminal charges have yet been filed.

Troy Wragg, 38, was denied his request for early release due to COVID-19, after having served less than 2 years of his 22-year sentence. Wragg perpetrated a $54 million Ponzi scheme through Mantria Corp.


INTERNATIONAL PONZI SCHEME NEWS

Canada

Authorities ordered Todd Norman John Bezzasso, Wei Kai (aka Kevin) Liao, and Bezzaz Holdings Group Ltd. and Nexus Global Trading Ltd. to pay a total of $6.3 million in connection with a Ponzi scheme that defrauded 85 investors.

China

Authorities detained Zhao Don, co-founder of the crypto lending platform, RenrenBit.

Authorities arrested 109 individuals in connection with the PlusToken bitcoin scheme. The arrests put an end to the scheme that had more than 2 million participants, and it involved digital currencies exceeding $5.8 billion.

Mexico

Two promoters of the OneCoin Ponzi scheme were found dead in Mexico. The bodies of Oscar Brito Ibarra and Ignacio Ibarra were found stuffed in suitcases and dumped in a vacant lot.

New Zealand

Barry Edward Kloogh, 57, was sentenced to almost 9 years in prison for his role in a Ponzi scheme that defrauded victims out of at least $15.7 million.
Nigeria

Umanah Umanah, 62, was arrested in connection with his involvement in the Ponzi scheme, No Burn Global Limited. Umanah promised investors 50% interest within one week from his company that he said was a consultancy and entrepreneurship service provider.

Philippines

Authorities have warned against Forsage, a gifting scheme run by Lado Okhotnikov, as a possible Ponzi scheme. The scheme uses fees collected from new members to compensate existing members.

Singapore

Fok Fook Seng, 52, was convicted for his role in marketing the OneCoin scheme. OneCoin has been determined to be a fraudulent scheme run by Ruja Ignatova and Konstantin Ignatov. OneCoin’s lawyer, Mark Scott, was convicted on charges that he laundered $400 million for the scheme.

South Korea

Authorities are investigating an alleged cryptocurrency scheme known as Futurenet that allegedly defrauded at least 950 investors our of $16.66 million. Futurenet was founded by Stephan Morgenstern and Roman Ziemian

Tuesday, June 30, 2020

June 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for June 2020. The reported stories reflect at least 8 new Ponzi schemes worldwide and an average age of approximately 55 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Timothy J. Allcott, 58, and Thomas D. Renison, were charged in connection with an alleged Ponzi scheme run through ARO Equity LLC. In a parallel proceeding commenced by the SEC, it was alleged that Allcott and Renison raised more than $6 million from at least 15 investors, promising interest payments between 8% and 12% per year.

Dee Dee Brooks aka Doris Takooshian accepted a determination from FINRA that she be barred from association with any FINRA member as a result of her participation in unapproved private securities transactions totaling more than $1.77 million, including investments related to Woodbridge Group of Companies and Future Income Payments. Brooks did not admit or deny the allegations but agreed to FINRA’s sanction.

Rhoda Burkholz had a final judgment against her in connection with an options trading Ponzi scheme conducted by her husband that defrauded at least 55 investors.

Craig Carton, 51, was released from prison after serving only 14 months of his 42-month sentence. Carton, a popular radio host, used his position to defraud investors in an event ticket scheme that involved $5.6 million.

Craig L. Clavin, 61, was charged in connection with an alleged $500,000 Ponzi scheme run through Lighthouse Futures Ltd. Clavin solicited investments into a fund known as Lighthouse Futures Commodity Pool that guaranteed returns from the commodities market.

William S. Evans of Kentucky was charged by the CFTC on allegations that he was running a Ponzi scheme through Turning Point Investments. The scheme allegedly solicited at least $10 million from investors and promised returns from a commodity fund that traded S&P futures.

Vincent P. Falci, 60, was denied his request for a compassionate release due to the coronavirus. He has only served one of a 15-year prison term. Falci had been convicted or running a Ponzi scheme through his investment vehicles, Saber Funds and Vicor Tax Receivables LLP.

Maurice Fayne aka Arkansas Mo, 37, of Georgia was indicted on charges that he used funds received from the Payback Protection Program that were intended to help small businesses survive the COVID-19 pandemic to help fund a Ponzi scheme and his lavish lifestyle. He used some of the PPP loan proceeds to assist him with the alleged scheme that had allegedly been running for 5 years. Over 20 individuals invested over $5 million in his company, Flame Trucking

Erik Hass was charged in connection with a $2.1 million scheme that defrauded at least 21 investors out of about $1 million. The CFTC is seeking an injunction against Hass and his company, Simply Gains.

Todd H. Lahr, 59, of Pennsylvania, agreed to settle with the SEC and pay more than $1.14 million on charges that he defrauded at 10 of his law firm clients. Lahr ran the scheme with Thomas Megas and they promised returns in business ventures included mining operations in Papua New Guinea and real estate investments in Barcelona and London.

Robert Cortez Marshall must pay the SEC more than $3.2 million in disgorgement and fines for a mobile advertising scheme he ran through R.B.J. Generational Wealth Management LLC which did business as Adz on Wheelz.

Jialin Niu and Troy McBride of Washington were sued on allegations that they defrauded investors in a Ponzi scheme based in China. The scheme promised returns through a company called Golden Sun Finance Education that was supposedly to finance expansion of a Seattle-area commercial real estate empire.

Modern Money Team was charged by the SEC for running a Ponzi-like cryptocurrency scheme. That raised over $12 million. The SEC sought to freeze the assets of Daniel Putnam, Jean Paul Ramirez Rico, and Anges A. Rodriguez. The scheme was run through MMT Distribution LLC and R&D Global LLC.

Nathan Ward Pyles and his real estate company, Shiloh Management Services, of Idaho had a judgment entered against him for his role in the Ponzi scheme that raised over $28 million from 55 investors.

Nevin Shapiro, 51, was released from prison due to COVID-19 and will be allowed to serve the rest of his 20-year sentence at home. He was scheduled for release in 2027. Shapiro was convicted in connection with a $930 million Ponzi scheme.

Brenda Smith, 59, of Philadelphia, was charged on allegations that she was running a Ponzi scheme. The scheme took in more than $68 million from about 40 investors and promised returns as high as 33%. Smith transferred tens of millions of dollars out of Broad Reach Capital to entities she controlled.

Paul Horton Smith, 56, of California was charged by the SEC on allegations that he defrauded senior citizens out of millions of dollars in a Ponzi scheme. Smith allegedly ran the scheme through Northstar Communications and promoted advisory, tax and financial planning services to create a trusting relationship used to solicit investors.

Phillip Roy Wasserman, 62, and Kenneth Murry Rossman, 62, were indicted on charges that they were running an alleged “fraudulent insurance venture” that included Ponzi-style payments to investors. Wasserman is a former lawyer and licensed insurance agent, and Rossman is a certified public accountant and licensed insurance agent. They defrauded victims out of at least $6.3 million. Wasserman is the self-described “Annuity King” and ran other investment businesses through Phillip Roy Financial Consultants and Phillip Roy Financial Services.

INTERNATIONAL PONZI SCHEME NEWS

Australia

Stephen John Anderson, 32, pleaded guilty to charged related to an automatic teller machine fraud. Anderson falsely stated that OneCash had purchased 143 ATMs, and 11 investors lost over $1.2 million in the scheme.

Gunter Lang, 80, was imprisoned in connection with a $6.5 million Ponzi scheme through the online platform, IG Markets. Lang was an unlicensed financial trader who defrauded about 32 investors.

Canada

The Ontario Securities Commission reports that QuadrigaCX is essentially a Ponzi scheme and that the firm collapsed due to fraud by the company’s co-founder and CEO, Gerald Cotten. The firm lost about $115 million from Cotten’s fraudulent trading. The scheme had about 76,000 clients. Cotten died in India in December 2018 at the age of 30.

Det. Sgt. Larry Renton, 56, is being investigated for an alleged Ponzi scheme that promised investors 21% to 26% returns. The scheme targeted fellow officers and about 40 officers and other civilians invested between $15 million and $20 million.

China

Chinese authorities are investigating the disappearance of the Iranian-based crypto exchanged called Bitisis. It is believed that the cryptocurrency exchange platform that targeted Chinese investors is a Ponzi scheme.

India

Authorities filed charges against 12 people in connection with an alleged Ponzi scheme run through Gold Sukh Trade India Limited.

Indonesia

Russ Albert Medlin was arrested as the suspected head of the $722 million Bitcoin Ponzi scheme known as BitClub Network. Medlin was arrested on sex charges and faces extradition to the U.S.

Taiwan

Ronald Aai was accused of defrauding 1,000 Taiwanese out of $30.32 million in an alleged cryptocurrency scheme known as Cloud Token.

Litigation News

The Eighth Circuit revived a hedge funds lawsuit against JP Morgan Chase & Co. in connection with the Thomas Petters Ponzi scheme. Ritchie Capital Mgmt. v. JP Morgan Chase & Co., 2020 U.S. App. LEXIS 17471 (8th Cir. June 3, 2020)

The Eleventh Circuit affirmed the dismissal of the Receiver’s lawsuit against JP Morgan Chase Bank NA in connection with the Coravca Distributions LLC and Timeline Trading Corp.

The U.S. Supreme Court declined to stop lawsuits by the trustee of the Bernie Madoff Ponzi scheme against foreign banks and investors. The claims are for about $3 billion that was paid out to them before the collapse of the Madoff scheme.

Sunday, May 31, 2020

May 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for May 2020. The reported stories reflect at least 5 new Ponzi schemes worldwide; at least 2 guilty pleas and convictions; and an average age of approximately 59 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
   
Neil Burkholz, 82, and Frank Bianco, 70, of Florida, were ordered to pay $2.8 million in disgorgement and penalties in connection with a $6 million Ponzi scheme run through Palm Financial Management and Shore Management Systems. The scheme defrauded at least 55 investors and targeted elderly investors.
 
Damon Elliott and Piptastic Ltd. were accused by the SEC of raising around $9 million from at least 30 investors. Elliot is a U.K. citizen and falsely promised American investors that their funds would be invested in spread trading or spreadbet trading, which involves speculating on the price movement of a security or other financial instrument.
 
William S. Evans III was charged by the CFTC in connection with an alleged $10 million Ponzi-like scheme. The scheme was run through Turning Point Investments and took money from 15 investors to trade commodity futures.
Mark George, an Ohio lawyer, had his license suspended indefinitely by the Ohio Supreme Court. George spent 16 months in prison for his role in a Ponzi scheme that promised returns from oil and gas investments.
 
Todd H. Lahr, 60, of Pennsylvania, an attorney who pleaded guilty last month to participating in a $2.7 million Ponzi scheme, was disbarred. Lahr told investors and clients of his law practice that he would use their money to invest in business opportunities around the world, including mining companies in Papua New Guinea and properties in London and Barcelona. He gave some investors promissory notes with a 10% return and gave others shares of his company, THL Holdings.

Casper Mikkelson aka Carsten Nielson was charged by the CFTC with running a fraudulent foreign exchange firm. Mikkelson allegedly ran the scheme with Brian Thomson, Thomas Jensen and Casper Muller through a retail foreign currency exchange trading firm called GNTFX. Mikkelson issues false statements to investors showing up to 55% returns in less than one year.

Ronald J. Roach, 53, and Joseph W. Bayliss, 44, pleaded guilty to charges in connection with the $2 billion Ponzi scheme run through DC Solar. Roach provided accounting and tax services to the solar energy company and years of false financial statements. Bayliss was a general contractor and electrician who provided services to the company and who signed false reports and destroyed evidence.

Paul Horton Smith Sr., 56, of California was charged by the SEC in connection with an alleged $5.6 million Ponzi scheme run through his companies, Northstar Communications, eGate and Planning Services. Smith offered 75 people an investment that he represented was safer than the stock market, and he promised returns of between 3% and 10.5%.

Lee D. Weiss, 51, of Massachusetts, was charged in connection with a $10 million scheme. Weiss is an investment advisor. Weiss is an investment advisor and the principal of Family Endowment Partners, LP, and he purportedly defrauded his own clients by promising them returns from investments in a Florida tobacco company and private securities offerings.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Authorities have accused Monita Hung Mui Chan, Sabrina Ling Huei Wei, Justin Colin Villarin, Marie Joy Vincent, and James Bernard Law of raising money for and promoting a U.S. Ponzi scheme run through DFRF Enterprises LLC in Massachusetts and Florida. The scheme was orchestrated by Daniel Rojo Fernandes Filho, a Brazilian national. The scheme raised about $15 million from more than 1,400 investors around the world.

China

Wang Wenjun and 15 others were arrested in connection with alleged fraud run though a group of companies, including Eaton Corporation, Polylion platform, and E-tong mall.

Wotoken was revealed as a $1 billion cryptocurrency Ponzi scheme with links to PlusToken. The scheme took in funds from more than 715,000 victims.

England

Anthony Jon Domingo Armstrong-Emery, 41, defrauded 850 investors out of £23,000 through a scheme run by EcoHouse Developments Ltd. The scheme claimed to be selling affordable social housing in South America. EcoHouse claimed to be part of a legitimate government project called Minha Casa, Minha Vida (My House, My Life), aimed at moving families from shanty towns to homes with water and electricity.

Zimbabwe

Authorities believe that Ecocash, a subsidiary of Cassava Smrtech, is engaged in a Ponzi scheme.

Thursday, April 30, 2020

April 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for April 2020. The reported stories reflect at least 5 new Ponzi schemes worldwide; at least 3 guilty pleas and convictions; new prison sentences of 39 years; and an average age of approximately 59 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
   
Blessing Loom, an alleged Ponzi scheme, has resurfaced in Utah. The scheme, promoted on social media, displays an octagon that must be filled with names of participants. It promises that if the investor pays $100 to get a spot and recruits other people, then the investor name makes it to the center of the octagon, and will be paid $800.

Barry R. Bekkedam, of Pennsylvania, the former owner of Ballamor Capital Management, settled charges by the SEC that he fraudulently solicited $100 million into the Ponzi scheme run by Scott Rothstein. Bekkedam was sentenced in 2017 to 11 months in prison.

Phillip Conley was charged by the SEC with running a Ponzi scheme that defrauded investors out of $5.2 million. Conley was associated with a registered broker-dealer but never invested clients’ funds as promised and instead delivered “materially false and misleading statements.”

William Neil “Doc” Gallagher, 79, or Texas, was sentenced to 25 years in prison and ordered to pay more than $10 million in restitution. Gallagher was a radio host and financial consultant who admitted to defrauding elderly investors in a Ponzi scheme. Gallagher targeted older, Christian listeners on his show called “The Money Doctor.” He guaranteed annual returns of 5% to nearly 9%. He received about $29.2 million from about 60 investors.

Karl Sebastian Greenwood was charged in connection with the OneCoin cryptocurrency scheme. Greenwood is a co-founder of the scheme that allegedly defrauded investors out of as much as $16 billion. The alleged mastermind of the scheme, Ruja Ignatova, is a fugitive and it is unknown whether she is alive.
 
Todd H. Lahr, 60, pleaded guilty to running a $2.7 million Ponzi scheme that targeted his law clients. Lahr practiced law for more than 30 years and persuaded his clients to invest in fictional companies, THL Holdings LLC and Ferran Global Holdings Inc. He promised returns from investments in mining operations in Papua New Guinea and residential leases in Spain and England.

Christopher A. Parris, 39, of Atlanta, an accused Ponzi scheme operator, was arrested on unrelated charges that he tried to defraud the Department of Veterans Affairs out of $750 million in connection with purchase orders for critical medical supplies during the coronavirus pandemic. Parris offered to sell millions of face masks and other personal protective equipment that did not exist. He promised that he could obtain millions of genuine 3M masks from domestic factories.

Benjamin Reynolds and Control Finance were the subject of a CFTC motion for default in connection with an alleged $147 million digital currency Ponzi scheme. Reynolds is the founder and operator of Control Finance which is believed to have defrauded 1,000 investors. Reynolds disappeared, along with 22,858 BTC, but the CFTC has been unable to locate him.
 
David Gilbert Saffron and Nevada-based Circle Society were charged by the CFTC with running a Ponzi scheme through a purported cryptocurrency and overseas alternate funding agency. Saffron provided binary choices on foreign exchange and cryptocurrency pairs and is alleged to have defrauded traders out of $11 million in dollars and bitcoin. At least 14 people invested and were promised returns of as much as 300%.

James Seijas, Michael Ackerman, and Quan Tran were sued by a group of investors accusing them of running a $35 million cryptocurrency Ponzi scheme known as Q3. Seijas worked as a financial advisor for Wells Fargo Advisors, Ackerman is a former New York Stock Exchange institutional broker, and Tran is a surgeon. The trio has already by accused of wrongful activity by the SEC and the CFTC. The scheme promised returns from trading cryptocurrency that would be successful using a proprietary algorithm developed by Ackerman.
  
Lee D. Weiss, 51, was charged with running a Ponzi scheme that defrauded clients out of $10 million. Weiss alleged ran the scheme through Family Endowment Partners, LP, a registered investment advisor, promising investors returns from a Florida tobacco company and private securities offering.
 
Kent R.E. Whitney, 38, agreed to plead guilty to one count relating to a Ponzi scheme run through the Church for the Healthy Self. The scheme solicited investments into CHS Trust and guaranteed annual returns of 12%. The scheme represented that the church’s traders had not lost money in 15 years and that the CHS Trust was federally insured. The scheme preyed upon the Vietnamese community and had at least 355 investors who invested more than $33 million. 

INTERNATIONAL PONZI SCHEME NEWS
 
Australia

Gunter Lang, 80, pleaded guilty in connection with a Ponzi scheme that defrauded investors out of about $6.5 million. Lang was an unlicensed financial trader who defrauded about 32 investors   lost about $7 million of investor funds. It is believed that 32 investors invested with Lang, who used the online platform, IG Markets, to defraud his victims.

China

A new alleged Ponzi scheme called Antimatter Kingdom has surfaced in China involving about $12 million in Bitcoin. The scheme promises large returns for users who deposit bitcoin into its “special” mining program. About 1,800 Bitcoin may have been deposited.

Nigeria

The SEC warned of the following suspected Ponzi schemes and advised against investing with these operators: Loom Nigeria Money; Box Value Trading Company Ltd; Now-Now Alert; Flip Cash Investment; Result Investment Nigeria Limited; Helping Hand and Investment; No Failure Development and Empowerment Nigeria Ltd.; MBA Forex and Investment Ltd; Federate Investors and Trading Company; Jamalife Helpers Global Ltd; Flexus Global Solutions and Investment Ltd; and United Capital Investment Company Limited.

Philippines

The SEC warned that Bitcoin Revolution is a Ponzi scheme promising exorbitant returns of 300% per day, or 9,000% per month. The program offers unregistered securities in the form of investment contracts, which is in violation of Philippine securities law. 

The SEC warned the public against dealing with 14 companies who have exploited the Covid-19 pandemic. Maginvestka.Online (MIK.O) purportedly trades bitcoin against the US dollar and is operated by “Mag Forex” and promises 2% returns daily. Azenzo-Online supposedly operates as an independent crowdfunding platform and promises a 30% return in 5, 10 or 15 days, and a 100% return after 20 days. Other entities flagged by the SEC included – Bitrade/Bitrade Bitcoin Trading Ltd/Bitrade Ltd PH; Bitcoin Revolution; E-Commerce/House of Entrepreneurs Inc, Fast Track Worldwide Inc, Narcfunds/Narcsfund, Munic Nation Inc., Munics Banks; Nextgen Global Alliance Corp (Nextgen), Nextgen Organic Farmers Cooperative (Naofaco); Fast Five System-United Phoenix Team; Non-stock Corporations, BIG500PH, and International VIP Financing/International VIP Financing PH.

Scotland

Alistair Greig, 66, was sentenced to 14 years in prison after he was found guilty of running an investment fraud through Midas Financial Solutions. The scheme defrauded 95 clients out of £13m. 

Solomon Islands

Police arrested Charles Dora, a director of the One Link Pacifica Ponzi scheme. The scheme promised a 300% return on investment within a month.

Thailand

Sitthanat Pho-ngern, 30, was arrested in connection with the Forex-3D Ponzi scheme for his role in luring investors into the scheme. It is believed that about 3,000 people invested 1.58 billion baht.

Vietnam 

Simon Le aka Le Quoc-Hung has reinvented the OneCoin Ponzi scheme under the new name, OneLink. Konstantin Ignatov, the leader of OneCoin was arrested last year, and his sister, Ruja Ignatova, escaped with over $500 million and is still at large. Simon Le positioned himself as the new leader of OneCoin and used the platform to promote his new scam, OneLink.

Tuesday, March 31, 2020

March 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for March 2020. The reported stories reflect at least 7 new Ponzi schemes worldwide; at least 4 guilty pleas and 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.
   
Stacey L. Beane, 35, Justin N. Deckert, 30, and Travis Laska, 26, were accused by the SEC of helping to hide a Ponzi scheme run through VisonQuest Wealth Management LLC. The three were employees of VisionQuest and are accused of assisting in a fraudulent offering of $10.1 million in promissory notes. Stephen C. Peters was the owner and principle of VisionQuest, and he also owned VisionQuest Capital LLC and VQ Wealth LLC.

Robert Blom, 58, of South Dakota, was indicted on charges relating to an alleged Ponzi scheme that was a custom cattle-feeding business. Losses are estimated at about $20 million, and there were 53 victims. Blom has pleaded not guilty.

Neil Burkholz, 82, and Frank Bianco, 70, and their companies, Palm Financial Management LLC and Shore Management Systems, were the subject of a judgment obtained by the SEC relating to a $6 million Ponzi scheme called the “Amazing Profits Group.” They allegedly defrauded about 55 investors through their companies, and falsely represented that their proprietary options trading strategies were highly profitable. They promised returns as high as 34% at a time when the fund actually lost 55% of its value. The SEC complaint also names Rhoda Burkholz and Suzanne Bianco as relief defendants.

Brook Church- Koegel, David H. Goldman and Nicole J. Walker were sued by the SEC for their alleged participation in the Woodbridge Group of Companies LLC Ponzi scheme run by Robert Shapiro. The three allegedly sold and assisted others in selling about $444 million in Woodbridge securities. The Woodbridge scheme raised at least $1.22 billion from more than 8,400 investors.

Breonna Clark aka Eliot Clark aka Alexander Pak was sued by the CFTC on allegations that he ran a Ponzi scheme that defrauded 72 victims out of more than $500,000. The alleged scheme was run through Venture Capital Investments, Enterprise Capital Investments Ltd. and The Life Group. The scheme promised returns from pooled investments in retail foreign currency contracts, Bitcoin and other cryptocurrencies.

Juan Carlos Cortes, Roberto Cortez, Ernesto Weisson, and their companies South Bay Holding and Biscayne Group, were sued by a group of 162 investors alleging that they were defrauded in a $250 million Ponzi scheme. The victims are mostly South American investors who were promised returns from real estate developments in Florida.

Christopher Dougherty, 47, pleaded guilty to charges that he ran a $6 million Ponzi scheme that defrauded 49 victims. Dougherty promised returns from investments such as a 100-acre organic cattle ranch and a marijuana growing project.

David Gentile and his company GPB Capital Holdings LLC are under investigation on allegations that they are operating a Ponzi scheme. The company represented that it bought income-producing auto dealerships and waste management businesses with investors’ funds. The scheme promised investors 8% returns.

Matthew Goettsche and Jobadiah Weeks submitted requests to be released from prison due to their fear that they may contract the coronavirus in prison. The two are in prison in connection with the BitClub crypto Ponzi scheme.

Barry Edward Kloogh, 57, pleaded guilty to defrauding investors out of at least $15.7 million. Kloogh had more than 2000 clients and ran the scheme by charging the payer for transactions through his e-banking system.

Todd H. Lahr, 60, of Pennsylvania, was indicted for his role in a $2.7 million alleged Ponzi scheme. Lahr is a lawyer and allegedly worked with others to target his clients through the fraudulent sale of securities for THL Holdings LLC and Ferran Global Holdings Inc. Investors were told that their money would be used for business ventures, including a mining operation in Papua New Guinea. Lahr pleaded not guilty, but a change of plea hearing has been scheduled for April.

Donnie Laing, Jr., 39, pleaded guilty to charges that he orchestrated a Ponzi scheme through his company, Capital Energy Investments, LLC. The scheme defrauded investors out of $1.2 million. Laing represented that he owned a business that bought and rented out oil and gas equipment.

Philip Elvin Riehl, 68, pleaded guilty in connection with a $60 million Ponzi scheme that targeted members of the Mennonite and Amish communities in Pennsylvania. Riehl is an accountant who allegedly solicited funds into a bogus investment program and then diverted the funds to Tricking Springs Creamery LLC. Public filings from the prior year show that Riehl and co-owners Gerald Byers, Elvin Martin and Dale Martin were accused of defrauding more than 100 investors out of nearly $9 million.

Zachary Salter, 28, the co-founder of Zima Digital Assets, and John Caruso, pleaded not guilty to charges in connection with an alleged cryptocurrency Ponzi scheme that defrauded investors out of $9 million. The alleged scheme involved more than 90 investors.

Michael Staisil was the subject of a subpoena enforcement action by the SEC due to his believed involvement in a $345 million Ponzi-like scheme run by Kevin Merrill, Jay Ledford, and Cameron Jezierski. Staisil is believed to have raised millions from the scheme that defrauded over 230 investors.

INTERNATIONAL PONZI SCHEME NEWS

England

The operations of Epayments were suspended after it was accused of having links to the cryptocurrency Ponzi scheme of Onecoin. Epayments was a money transfer firm and held more than $200 million in customer deposits for more than 1 million customers.

Alistair Greig, 66, was accused of running a Ponzi scheme that guaranteed high rates of returns to nearly 200 investors. The scheme was run through Midas Financial Solutions and involved $16.4 million.

India

Fourteen people were arrested in connection with an alleged Ponzi scheme run through Cane Infotech Limited, Cane Agricultural Developer Limited India and Cane Agro Cooperative Society. The accused are Sukhchain Singh and his wife Sarbjit Kaur; Sukhwinder Singh and his wife Paramjit Kaur; Gurwinder Singh; Jugraj Singh; Mahavir Singh; Raj Kumar; Sandeep Puri; Gursewak Singh; Navinder Singh; Kuldeep Singh; Baljit Singh and Kuldeep Singh.

Somalia

A Kenyan man identified as Abdalia allegedly sold more than 20 Somalia MPs from Somalians through a forex-trading company called Maalin.

Taiwan

Chiu Tzu-chien, 64, Lee Chun-lin, 64, and Chiu Hui-ying, 61, were charged in connection with a $143.6 million alleged Ponzi scheme that defrauded 1,115 people.  The scheme was run through Mega Dynamo Technology Co. which supposedly focused on wind energy generation and chemical and construction materials. Victims were told that the company owned the patent for “green concrete” and were promised returns of 8.4% to 12%.

Saturday, March 7, 2020

Should Bernie Madoff go free?


Bernie Madoff, currently serving his 150-year prison term, is seeking a compassionate release due to what is described as terminal kidney failure and less than 18 months to live. We are interested in your views on whether Madoff should be released after having served 11 of the 150 year sentence.  Click the link below to express your views on the following poll:


Should Bernie Madoff be granted a compassionate release after serving 11 years of a 150 year prison term?

1. Yes

2. No


For more information on the ongoing legal battle, see https://www.foxnews.com/us/bernie-madoff-ponzi-scheme-everything-you-should-know.


Saturday, February 29, 2020

February 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for February 2020. The reported stories reflect at least 5 new Ponzi schemes worldwide; at least 5 guilty pleas and convictions; over 19 years of newly imposed sentences for people involved in Ponzi schemes; 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.
   
Michael Douglas Billings, 59, and his company MDB Group LLC, were accused by the SEC of unlawfully selling unregistered securities in connection with the Madison Timber Properties, LLC Ponzi scheme. Arthur Lamar Adams was previously sentenced to 19½ years in prison for the $100 million scheme.

Robert L. Blom, 58, of South Dakota, pleaded guilty to one charge in connection with what is being called a “cattle Ponzi scheme.” The scheme appears to involve 30,000 missing cattle and 53 defrauded victims. First Dakota National Bank says it is owed more than $7 million, and Blom was charged with writing bad checks in the amount of $135,000.

Monique N. Brady, 45, of Rhode Island, was sentenced to 8 years in prison and ordered to pay $4.78 million in restitution for operating a Ponzi scheme through her company, MNB, that involved large-scale real estate projects. The projects cost less than she represented to investors and in some cases the projects didn’t exist. Of the 171 properties Brady represented she had for projects, 98 were for properties her company was never hired to preserve or no work was done. Brady asked her investors to delete all emails, texts and documents relating to the rehabilitation projects. The scheme brought in $10 million and defrauded 23 investors out of $4.8 million.

John Michael Caruso, 28, of Arizona, was arrested on charges that he was running a fraudulent scheme through Zima Digital Assets, a blockchain and cryptocurrency investment firm. Zachary Salter, 27, was also arrested in connection with the alleged scheme that took in more than $7.5 million from more than 100 investors. Caruso, who refers to himself as “Krypto King” has a criminal history, and he founded Zima following his release from prison in 2017. The Zima website claimed that the firm “operates various private funds focusing on investments in cutting-edge technologies, including crypto and other blockchain based assets.”

Breonna Clark aka Eliot Clark aka Alexander Pak, of Colorado, and his firm Venture Capital Investments Ltd. and The Life Group, were charged by the CFTC with running a cryptocurrency Ponzi scheme. Clark is a commodity pool operator and commodity trading adviser who allegedly defrauded investors. The scheme brought in over $500,000 and defrauded about 72 people.

Kenneth Courtright, 49, of Illinois, the owner of The Income Store aka Today’s Growth Consultant Inc., was arrested on criminal fraud charges in connection with an alleged Ponzi scheme that raised at least $75 million from more than 500 investors. Courtright promised annual returns of 20% in return for a six-figure upfront fee used to build and operate websites.

Brian Davison, Barry M. Rybicki, and EquiAlt LLC were sued by the SEC on allegations that they were running a $170 million Ponzi scheme that defrauded about 1,140 investors. EquiAlt promised investors returns of 8% to 10% from renting or flipping real estate purchased in distressed markets. The SEC alleges that the scheme was run through four funds - EquiAlt Fund LLC, EquiAlt Fund II LLC, EquiAlt Fund III LLC and EA SIP LLC.

Li Lin Hsu aka Yilin Hsu Lee, 42, of California, was sentenced to 11 years in prison and ordered to pay $5.3 million in restitution in connection with a Ponzi scheme that defrauded 20 investors out of more than $8.1 million. After Hsu was terminated from Ameriprise, she started her own companies, American Capital Trading Group and American Capital Republic, where she promised investors their funds would be invested in low-risk municipal bonds.

Leroy King pleaded guilty to taking bribes to hide the Stanford International Bank Ponzi scheme from U.S. and Antiguan investigators. King is the former chief of Antigua’s Financial Services Regulatory Commission and obstructed the SEC’s investigate into the companies operated by Allen Stanford. King had received more than $500,000 from Stanford along with gifts and trips on Stanford’s private jets.

Bernard Madoff, 81, requested a compassionate release from prison due to terminal kidney failure and other medical conditions. Madoff has served 11 of his 150-year prison sentence that he is serving after pleading guilty to his multi-billion Ponzi scheme.

Edward E. Matthes, 49, has been barred by the SEC from working in the securities industry for his role in a Ponzi scheme stealing $2.4 million from 26 customers.

Jeffrey Scott Nimmow of Chicago was barred from the securities industry by FINRA for selling more than $3.3 million in Woodbridge Group of Companies LLC promissory notes to 18 investors. Woodbridge was charged by the SEC with operating a Ponzi scheme.

Brett Pittsenbargar, 47, was arrested on charges that he was a “top revenue producer” for Woodbridge Group of Companies, LLC, a Ponzi scheme operated by Robert Shapiro. Shapiro was sentenced to 25 years in prison after pleading guilty last year. Pittsenbargar raised more than $18 million for the scheme from 43 clients.

Philip Elvin Riehl, 68, was charged in connection with an alleged $60 million Ponzi scheme that targeted members of the Mennonite and Amish communities in Pennsylvania. Riehl is an accountant who allegedly solicited funds into a bogus investment program and then diverted the funds to Tricking Springs Creamery LLC. Public filings from the prior year show that Riehl and co-owners Gerald Byers, Elvin Martin and Dale Martin were accused of defrauding more than 100 investors out of nearly $9 million.

Robert W. Russell, 60, was accused of running a Ponzi scheme through SMRB aka Green Acre Pharms. The scheme allegedly took in $4.85 million from at least 24 investors. Russell and his partner Guy Scott Griffithe, 40, allegedly spent $3.5 million on luxury items for themselves.

Gary Scheer, the managing member of Retirement Financial Advisors in New Jersey, had his registration as an investment advisor revoked by the New Jersey Bureau of Securities and he was assessed $750,000 in civil penalties. Scheer sold unregistered securities in seven investments to at least 50 investors in connection with the Woodbridge Group of Companies Ponzi scheme.

INTERNATIONAL PONZI SCHEME NEWS
China

Chinese exchange FCoin shut down according to FCoin’s founder, Zhang Jian. The company cannot pay back the 7,000 to 13,000 BTC that it owes, and investors fear that the company was operating a Ponzi scheme. The CEO claims that the loss of $125 million of customer funds was due to technical errors.

India

Dasarath Boora, Adi Ganesh, Fakruddin and Sandeep were arrested in connection with a Ponzi scheme that defrauded about 400 investors. The four confessed to operating a Ponzi scheme under the guise of an online gateway to casinos that would offer people outside of the state to be able to play and invest in the casinos.

New Zealand

David Ross has been released from prison, having been granted parole 4 years before the end of his 10-year, 10-month sentence. Ross was convicted for his role in a $115 million Ponzi scheme that defrauded more than 700 investors.

Philippines

Togachat Academy Philippines Inc. lost its corporate license on allegations that it was running a Ponzi-type investment program. Investors purchased Toga credits which they could use to buy shares in Toga Ltd. upon its supposed listing on NASDAQ.

Solomon Islands

The Central Bank of Solomon warned the public against putting money into One Link Pacifica, calling it a Ponzi scheme. One Link promised investors 300% returns within 30 days.

Friday, January 31, 2020

January 2020 Ponzi Scheme Roundup


Below is a summary of the activity reported for January 2020. The reported stories reflect at least 5 new Ponzi schemes worldwide; at least 5 guilty pleas and convictions, over 24 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.
   
Malik Akbar’El aka Tyrone David Williams aka Skipper David Williams, 52, of Arkansas, was accused of running a Ponzi scheme. He ran the alleged scheme through Akbar Williams & Associates Legal Services Corporation and promised 300% to 480% returns from supposed investments in charities and organizations that would generate a profit. He allegedly defrauded 252 investors.

Bitmain was asked to suspend its IPO due to its connection with the BitClub Ponzi scheme. Bitmain sold mining equipment to BitClub, which defrauded victims out of over $722 million.
 
Kari M. Bracy was barred by FINRA from engaging in securities transactions in light of her involvement with Future Income Payments. Bracy sold investments in the scheme that recruited pension holders, including veterans of the armed forces. Investors were defrauded out of about $300 million.
 
Hal H. Brown Jr., 70, of North Carolina, pleaded guilty to running a $22 million Ponzi scheme that defrauded more than 23 victims. The scheme was run through Oodles Inc. Brown misrepresented that Oodles owned hundreds of millions of dollars in intellectual property and presented investors with false financial information and documentation.
 
Jeff Carpoff, 49, and Paulette Carpoff, 46, pleaded guilty to charges brought in connection with the $1 billion Ponzi scheme run through DC Solar Solutions. The scheme offered investors huge federal tax incentives to lease mobile solar generators typically used at racetracks and concert venues or to power remote cell phone towers during power outages. They used investor funds “to support a lavish lifestyle, which included payment for more than 150 luxury and collector vehicles, luxury real estate in Lake Tahoe, Las Vegas, the Caribbean, Cabo San Lucas, Mexico, and elsewhere, a suite at a professional football stadium, a private jet service, gambling, jewelry, and other personal property.”

Kenneth D. Courtright III, 49, of Illinois, was accused by the SEC or running a Ponzi-like scheme that raised more than $75 million from more than 500 investors through his company, Todays Growth Consultant Inc. Courtright is the owner of The Income Store through which he promised investors annual returns of up to 20% per year forever in return for a six-figure upfront fee used to build and operate websites.

Michael J. DaCorta, 55, was charged in connection with the Ponzi scheme run through Oasis International Group Ltd. DaCorta allegedly defrauded about 700 investors investors out of $72 million, but he has entered a plea of not guilty. Oasis president Joseph S. Anile II pleaded guilty to the scheme last year and is cooperating with authorities.

Andres Fernandez, 38, was sentenced to 10 years in prison in connection with a scheme that defrauded at least 81 people out of $14.98 million. Fernandez solicited investors to invest in concerts that his company, Kadaee Entertainment, helped produce. Fernandez promised investors that they could double their money and he promised them free tickets to concerts. He showed his clients fake contracts and spent the funds largely on his personal expenses and to pay earlier investors.
 
Guy Griffithe and Robert Russell were charged by the SEC with fraudulently selling fake interests in a cannabis company called SMRB. The sales took place through two firms controlled by Griffithe, Renewable Technologies Solution and Green Acres Pharms. The scheme defrauded at least 25 investors out of $4.85 million.
 
Ryan Guidry, 43, pleaded guilty to participating in a Ponzi scheme that defrauded investors out of $1 billion. The scheme was run through DC Solar and sold solar generators mounted on trailers to be used for emergency power for cellphone companies or to provide lighting and sporting and other events. Joseph W. Bayliss, 44, Ronald J. Roach, and Robert A. Karmann, 53, each previously pleaded guilty to related charges.

Edward Matthes was accused of running a Ponzi-like investment scheme that defrauded investors in Wisconsin out of $2.4 million. The SEC alleged that he defrauded 26 people, who were mostly elderly brokerage customers, by promising them returns of 4% in safe investments.

Robert Menard, a Milwaukee attorney was accused of running a Ponzi scheme and stealing about $250,000 from his clients.
 
Robert C. Morgan was ordered to pay back more than $63 million to defrauded investors. The SEC obtained the order after charging Morgan with fraudulently raising money from more than 200 investors, promising them a return of 11%. Morgan owned multi-family properties but he ordered employees to falsify financial documents to get larger loans on the acquisition of the properties.

Gerald Ortiz of Colorado was ordered to pay $1.2 billion in restitution by the Colorado Division of Securities. Ortiz, through his company, Colorado Retirement Specialists LLC sold unlicensed securities from Woodbridge Group of Companies LLC. Woodbridge was charged by the SEC with operating a Ponzi scheme.
 
Steven Pagartanis, 60, was sentenced to 14 years and 2 months in prison and ordered to pay $6.5 million in restitution in connection with a Ponzi scheme that spanned 18 years and scammed 17 victims. Pagartanis solicited elderly victims to invest in real estate-related investments and promised returns of 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.

Christopher Parris, 39, of New York was accused of running a Ponzi scheme with Perry Santillo, using their business, Lucian Development. They are accused of defrauded almost 1,000 investors out of at least $115,500,000. Santillo pleaded guilty last year.

Jason Rhodes, 47, of Connecticut, pleaded guilty to charges in connection with a scheme to defraud approximately 25 investors in Sentinel Growth Fund Management LLC. The scheme solicited about $19.6 million into a hedge fund by promising returns from investments in securities. Sentinel co-founder, Mark Varacchi, previously pleaded guilty to the scheme.

Steve Schwartz, 76, was accused of assisting an alleged $287 million Ponzi scheme run through 1 Global Capital LLC. The investment program purported to offer short-terms loans at high interest rates to small and medium-sized businesses.

Landon M. Smith, of Utah, settled with the SEC and agreed to pay more than $1.1 million in disgorgement and interest. Smith was sentenced to 3 months in prison in connection with a scheme that defrauded over 50 investors out of $2.5 million. Smith represented that he was a real estate wholesaler who would use investor funds to purchase and then resell properties.

INTERNATIONAL PONZI SCHEME NEWS
 
Philippines

Cease and desist orders were entered against 5 investment companies that were promising large returns. Rigen Marketing, offered returns of up to 400%; Ever Arm Marketing, offered returns of up to 400%; Organico Agribusiness offered returns of up to 66.67% percent return after 90 days; and Kapa Community Ministry International Inc. offered 30% monthly “blessing or love gift” per month on donation for life.

Turkey

Orhan Tath and Irfan Alkan were accused of running a scheme through Sutbank, or Milk Bank, that defrauded about 1,300 people. The scheme offered investors returns from investing in the purchase of five cows and receiving monthly payments from the sale of milk from the cows.
 
Uganda

More than 5,000 victims have appealed for a refund of money they invested in Dunamiscoin Resource Ltd., a cryptocurrency scheme that has been alleged to be running a Ponzi scheme and that was shut down last year. The scheme promised returns of 30% to 40% in a short period.