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

Saturday, October 31, 2020

October 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for October 2020. The reported stories reflect at least 9 new Ponzi schemes worldwide, 6 guilty pleas, 202 years of prison sentences, 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.   

Steven F. Brown, 52, an accountant in California, agreed to plead guilty to charges that he ran a $3.3 million Ponzi scheme that promised investors returns from foreign exchange currency. Brown ran the scheme through Alpha Trade Analytics Inc. and promised investors monthly returns of around 10%.

Christopher W. Burns, 37, and his company Matson Money, Inc., were sued in a class-action suit alleging that he defrauded 100 investors in a Ponzi scheme. 

Jason T. Castenir was sentenced to 53 months in prison for his role in a $2.4 million Ponzi scheme run through Maverick Asset Management LLC. Castenir ran the scheme with Rodney Scott Phelps, who was found guilty last year and sentenced to 108 months in prison. 

Garrison Courtney was sentenced to 7 years on prison in connection with a Ponzi scheme in which he posed as a covert CIA operative. His false identity defrauded investors to pay for either a special operations forces program operating covertly in Africa or a separate program aimed at enhancing the United States’ intelligence collection abilities.

Edison Denizard, 40, pleaded guilty to a $7 million investment fraud that mispresented that investors were investing in specific music concerts through companies owned by Denizard and Andres Fernandez. The companies, Kadaae, LLC and Kadaae Entertainment Corp. raised $20.7 million from at least 56 investors. Denizard and his company, Ahead of the Game, LLC, raised approximately $10.4 million from at least 78 investors through an unregistered offering of securities. 

Thomas J. Gity was sued by the SEC for allegedly operating a $6.8 million cryptocurrency Ponzi scheme. Gity was previously convicted for operating fraudulent fund-raising campaigns with his son. Gity set up a digital asset trading firm even though he had no industry experience and raised funds from at least 18 investors. Only $970,000 of the $68 million raised was used in trading accounts. Gity provided investors fake account statements that misrepresented that he managed as much as $100 million in assets and generated returns greater than 46% in a week.

Suzette Hart, 54, of New Jersey, was charged with running an alleged Ponzi scheme that defrauded investors out of $300,000. Hart is a high school teacher who defrauded friends and co-workers. She had promised returns to investors in “high-yield, well-known” investment opportunities, knowing the investments were fraudulent.

Benny Judah, 61, was denied his request to reduce his 25-year prison sentence. 

Rand Heckler, 55, was charged in connection with an alleged Ponzi scheme that he ran through a hedge fund of stocks and securities that he managed. Heckler allegedly defrauded at least 4 friends out of about $1 million through his corporation, Rand Heckler, Inc. Heckler pleaded not guilty.

Marc Lawrence, 66, of New York, pleaded guilty charges that he was operating as a Ponzi-like scheme through a venture capital firm called Downing. Lawrence’s co-defendant, David Wagner, pleaded guilty in September. The two defrauded employee-investors of their purported venture capital firm out of $8 million. After some employees filed lawsuits, Lawrence recruited investors in a new company called Cliniflow Technologies, LLC.

Gary Pryor, of Arizona, and his companies, ZipRemit, Inc. and Lendaily Inc., were charged by the SEC and accused of running an alleged $2.9 million Ponzi scheme. Pryor claimed to offer merchant branded consumer credit at the point of sale and misrepresented that he had developed proprietary software. Pryor diverted $1.4 million of the investor funds for his personal use.

Keith Raniere was sentenced to 120 years in prison in connection with a Ponzi scheme that he ran through NXIVM. Raniere was convicted in 2019 on conspiracy and sex trafficking charges and the self-help organization he created was exposed as a Ponzi scheme. 

Paul Rinfret, 71, pleaded guilty to charges in connection with his role in a $19 million Ponzi scheme run through Plandome Partners L.P. Rinfret failed to invest investors’ funds as promised but instead diverted the majority of investor funds to his personal use or to make Ponzi-like payments to investors. He falsely represented that he would use investment funds to trade future contracts tied to the S&P 500 index using a purportedly proprietary trading algorithm and took a fee of 25%. Rinfret was sentenced to more 63 months in prison for participating in the scheme.

Ken Rossman and Phil Wasserman were charged in connection with an alleged Ponzi scheme that defrauded investors out of at least $6.3 million. The two have pleaded not guilty.

Alexander S. Rowland, 29, of Pennsylvania, was accused of running a $2 million scam through his firm, Roaring Investments LLC. An estimated 122 victims were defrauded through promises of a minimum return of 25% on investments in stock and cryptocurrencies.

David Smith was released from prison in Turks and Caicos where he served 6½ years of his 10- year prison sentence. However, the U.S. is trying to have him extradited to the U.S. to serve a 20-year prison imposed in the U.S. Shortly after his release for good behavior, he was arrested and taken into custody to face extradition to the U.S. in connection with a $220 million scheme that was first launched in Jamaica. 

Paul Horton Smith Sr., 56, of California, and his companies, Northstar Communications LLC, Planning Services Inc., and eGate LLC were ordered to pay $8.9 million in connection with a Ponzi scheme. Smith, a financial planner, duped mostly senior citizens into investing in fake securities and defrauded at least 35 investors.

Leo Vaccarelli, 43, was sentenced to 7½ years in prison following his conviction in connection with a Ponzi scheme that defrauded investors out of more than $1 million. 

Giuseppe Valentino, 52, was captured while he was on federal probation on charges that he defrauded investors through his company Rhineau LLC. Valentino alleged defrauded investors out of $500,000 by representing that he had developed a proprietary algorithm for the execution of binary options. 

Lewis Wallach, 64, of California, was charged in connection with an alleged $330 million Ponzi scheme run through Professional Financial Investors Inc. and its associated fund, Professional Investors Security Fund Inc. PFI owns about 70 properties and Wallach helped manage the firm with the late Kenneth Casey. Wallach allegedly misappropriated more than $26 million from 1,300 investors for his own benefit and knew that the revenue from the properties was insufficient to pay investors. Wallach is expected to plead guilty to criminal charges and has already plead in response to SEC civil charges. 

Howard L. Young, 75, of Nashville, was charged in an alleged Ponzi scheme that defrauded investors out of $700,000. Young founded Integrative Medical Services, purportedly a holistic wellness business. He solicited cancer patients, investors and employees and claimed he had been awarded a grant to study cancer.

Craig Zabala, 68, the CEO of Concorde Group Holdings Inc., pleaded guilty to charges that he defrauded 17 investors out of at least $4.38 million. Zabala misrepresented that Concorde was a merchant banking firm that was investing in and buying other financial service companies. Zabala also ran the scheme through the following other financial service companies: Concorde Group, Inc., Blackhawk Capital Group BDC, Inc., DBL Holdings, LLC, d/b/a Drexel Burnham Lambert, Concorde Investment Managers, LLC, and Concorde Europe, Ltd.

INTERNATIONAL PONZI SCHEME NEWS 

Australia

Matthew Alan Beresford was arrested, and the websites and bank accounts of Maxwell Financial Services and Asset Capital Holdings were frozen by authorities.

Harpreet Singh Sahni, 45, confessed to running a $50 million cryptocurrency scheme. Sahni claimed his program promoting the Plus Gold Union Coin was “the safest investment on Earth right now.”

Canada

Jason Gaurana, 37, was arrested and charged in connection with an alleged multi-million Ponzi scheme known as Project Cosmo that targeted the Filipino community in Toronto. Authorities are also looking into Infy Trading Inc., D-Con Design and Construct Solutions Inc. and the church, The Vessels of Hope International Community Church, as allegedly being involved in the scheme.  The scheme alleged defrauded investors out of more than $3.5 million. Glenda Estevez, 45, and Teddy Lee Estevs, 44, have previously been charged in connection with the scheme.

China

Gao Yudong, Li Qibing, Wang Xiaoying, and Tian Bo were sentenced in connection with a $1 billion Ponzi scheme run through WoToken. The scheme is believed to have defrauded over 715,000 investors. 

England

Joseph Lewis was sentenced to over 5 years in prison for his role in a $26.7 million fraudulent scheme. Lewis solicited clients into a foreign exchange trading scheme that he ran through Joe Lewis Trading.

Stephen Allen was criminally charged in connection with an alleged scheme run by Renwick Haddow through Bar Works. The scheme had 800 victims who invested more than $50 million in the scheme. Allen is accused of conspiring with Haddow to prevent an Haddow’s interest in a London property from being available as an asset to satisfy an order.

India

Authorities convicted 8 people and sentenced them to life imprisonment in connection with the Pincon Group Ponzi scheme. Manoranjan Roy is the head of the scheme and is currently hospitalized with health issues. His wife, Mousumi Roy, has absconded. 

Nishad K., 36, was arrested in connection with a three-pronged cryptocurrency Ponzi scheme. The alleged scheme was run through Long Reach Global, Long Reach Technologies, and Morris Trading Solutions. Nishad offered “Morris Coins” and promised returns of about $3.70 per day, or about 1.85% of the minimum investment. The scheme also offered a 10% to 40% commission to investors for bringing in new investors. 

Sachin Bhati, 35, Pawan Bhati, 33, and Ganga Nagar, 50, were arrested in connection with the Bike Bot Ponzi scheme. The arrest brings the total to 14 for people arrested in connection with the app-based motorcycle taxi company. Pawin and Sachin were directors of Garvit Innovative Promoters Limited which first floated the Bike Bot scheme. 

Anugrah Stock and Broking Pvt was accused of running a Ponzi scheme that defrauded about 40,000 investors. Investors were promised returns up to 20% from stock trading.

Nigeria

Umanah Umanah, 62, was arraigned on charges that he defrauded investors through his company, No Burn Global Limited, through false promises of returns of 50% weekly. Umanah pleaded not guilty.

Philippines

The SEC ordered Forsage and Forsage Philippines to stop soliciting investments through a crowdfunding platform based on Ethereum blockchain technology. The order also covers Forsage’s operators, agents, and sales people, including Rich Alex Apuntar, Vhellpoe Forlares Garves, Yuka   Kuroyanagi, Christopher Doroliat, Iam Kim, Jairra Fab Teoxon, Mark Nicole Escabarte Valeria, Myra Cris Sapar, Romnick MelaƱez, and Vel Cabalza.

John Garcia was arrested on charges that he masterminded a Ponzi scheme through Rigen Marketing that took in P8 billion from victims. Rigen offered 400% returns on investors. Paul Auditor was arrested last year in connection with the scheme.

South Africa

Authorities raided the homes of two principal members, Clynton and Cheri Marks, of Mirror Trading International, an alleged bitcoin Ponzi scheme. 

Spain

Santiago Fuentes, the founder and CEO of Arbicorp, was arrested on charges that he was operating a Ponzi scheme through Arbicorp that developed Abistar 2.0, a bitcoin trading platform. Authorities began investing allegations that about $1 billion of investor funds were missing. The firm froze all accounts last month, citing a trading bot malfunction that caused the system to pay excess profits. Fuentes has denied the claims. About 32,000 investors were allegedly defrauded.

Wednesday, September 30, 2020

September 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for September 2020. The reported stories reflect at least 11 new Ponzi schemes worldwide, 4 guilty pleas, 31 years of prison sentences, 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.   

Joseph Frank Abel, 50, of California, pleaded guilty to charges in connection with a cryptocurrency mining fraud that involved at least $722 million. Abel admitted that he sold unregistered securities for BitClub Network. Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks were also charged in connection with the scheme. 

Jose Angel Aman, 51, of Florida was charged with operating a Ponzi scheme that brought in over $25 million through Natural Diamonds Investment Co. and Eagle Financial Diamond Group. Aman claimed to be developing a diamond-backed token and promised investors their fund would be used to purchase diamonds that Aman would clean, cut, and resell for profit. Aman started a new business that he ran through Argyle Coin, LLC, which planned to develop a crypto token backed by diamonds. 

Syed Arham Arbab, 23, was sentenced to 5 years in prison and ordered to pay about $500,000 in restitution in connection with a Ponzi scheme that he ran from his fraternity house while a student at the University of Georgia. Arbab defrauded more than 100 people out of about $1 million. Arbab previously pleaded guilty to running the scheme through his companies, Artis Proficio Capital Management and Artis Proficio Capital Investments.

Steven Fitzgerald Brown, 52, or California, was charged by the SEC with operating a Ponzi-like scheme through Alpha Trade Analytics Inc. The scheme raised approximately $7.5 million from more than 75 investors claiming that the fund would invest in the financial markets in foreign exchange, but the SEC alleges that less than 3% of the funds were invested. Investors were promised safe and risk-free investments and were promised returns of 8% to 12%. Brown agreed to plead guilty.

Natalie Cochran pleaded guilty to charges related to an investment fraud she ran with her late husband, Michael Cochran. The scheme was run through Tactical Solutions Group and Technology Management Systems, which were government contractors. Cochran filed bankruptcy following the fraud charges. 

Milton J. Dosal, Jr. of Colorado settled charges brought by the SEC that he ran an alleged Ponzi scheme that targeted U.S. military service members. The scheme raised $100,000 from about 41 investors and promised the investors weekly returns of 10%. Dosal did not admit or deny the allegations. 

Raymond Erker, Kevin Krantz, and Tara Brunst, of Ohio, were indicted in connection with an investment scheme that brought in more than $9.3 million from 54 investors. Investors were told that their funds would be used to buy annuities and secured notes but instead the money was either misappropriated or placed in high-risk start up companies. 

Zvi Feiner, 50, and Erez Bayer, 50, of Chicago were arrested in connection with an alleged scheme that involved a nursing residence chain through FNR Healthcare LLC. Feiner is a rabi who owned the chain with Bayer. The scheme defrauded 75 members of the Orthodox Jewish community out of more than $22 million. The SEC had filed an action against Feiner and Bayer last year.

Scott Allen Fries, of Ohio, was charged by the SEC with defrauding clients in an alleged Ponzi-like scheme. Fries recommended that his brokerage clients invest with him outside of his brokerage firm.

Golden Genesis Inc. was ordered to cease and desist by the Missouri Secretary of State. The company sold more than $9 million in unregistered, non-exempt securities in the form of promissory notes through a Las Vegas-based unregistered broker-dealer, Retire Happy LLC. The scheme defrauded more than 240 investors. Thomas Casey, Dennis Di Ricco, Cynthia Wade, were ordered to show cause why they should not be ordered to pay restitution plus interest, civil penalties and investigation costs totaling more than $1 million.

Denni M. Jali, Arley Ray Johnson and John Erasmus Frimpong, of Maryland, were indicted for running what is alleged to be a $28 million Ponzi scheme. They are accused of passing themselves off as pastors to defraud churchgoers and others through their investment scheme involving cryptocurrency and foreign-exchange trading that promised 35% returns. They ran the scheme through their company, The Smart Partners, LLC aka 1st Million, which they ran as a wealth management and financial literacy firm. They defrauded approximately 1,200 investors. The SEC and the CFTC have also filed complaints against them.

Donnie Laing, Jr., 40, was sentenced to 3 years in prison in connection with a $1 million Ponzi scheme run through Capital Energy Investments LLC. Investors were led to believe that their funds were invested in oil and gas equipment that would be leased to companies engaged in oil and gas exploration.

Andrew Dale Ledbetter, 78, was charged in connection with the 1 Global Capital LLC alleged scheme. The SEC alleged that Ledbetter, a Florida attorney, raised more than $100 million from investors in connection with the scheme.

Jose Anibal Linares, 42, of Texas, pleaded guilty to charges relating to a Ponzi scheme run through JC Loans Finance and Inversiones JC Dallas. The scheme promised monthly returns based on investments in commercial and residential real estate, including a water resort and shopping centers in Honduras.

Paul A. Rinfret, of New York, was sentenced to 63 months in prison in connection with a $19 million Ponzi scheme he ran through Plandome Partners LLC. Investors were promised returns from the supposed trading of futures contracts, but only a small amount of their money was actually invested. Rinfret had pleaded guilty to the scheme last year and was ordered to pay back $12.3 million to the six victims.

Pablo Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Milan, and Jackie Aguilar were charged in connection with an alleged Ponzi scheme run through AirBit Club. The scheme is allegedly a multilevel marketing club involving cryptocurrency. 

Denise Gunderson Rust, 61, was sentenced to 18 months in prison in connection with her husband’s Ponzi scheme run through Rust Rare Coin. Rust claims that she did not know that her husband, Gaylen Rust, was running a scheme, but she did not tell anyone when she learned that her husband was not doing what he told investors he was doing. Criminal cases against Gaylen Rust and their son, Joshua Rust, are pending. 

Mark Scott was the subject of a forfeiture action brought by the Department of justice seeking to confiscate about $400 million to Scott. Scott was the attorney who helped accused OneCoin launder hundreds of millions of dollars.

Steven M. Sexton and his firm, Sexton Advisory Group Inc., settled charges brought by the SEC that they were acting as unregistered brokers when raising $4.6 million as part of the Woodbridge Group of Companies LLC Ponzi scheme.

Avinash Singh was charged by the CFTC in connection with the commodity pool known as Highrise Advantage LLC. Daniel Cologero and Randy Rosseau were also charged with fraudulently soliciting investors into the scheme through commodity pools, Green Knight Investments LLC, Bull Run Advantage, LLC, and King Royalty, LLC. The complaint also charges Suruipaul Sahdeo and SR&B Enterprises with unlawfully soliciting funds to Highrise. The scheme brought in $4.75 million.

TMTE, Inc., d/b/a Metals.com, Chase Metals, LLC, Chase Metals, Inc., Barrick Capital, Inc. and its principals, Lucas Asher a/k/a Lucas Thomas Erb a/k/a Luke Asher, and Simon Batashvili were charged by the CFTC in collaboration with 30 state securities regulators with running a nationwide fraud that brought in $185 million. Tower Equity LLC is also charged as a relief defendant. All are located in California. The scheme targeted elderly victims and defrauded 1,600 investors. The defendants allegedly defrauded customers into purchasing precious metals bullion at grossly inflated prices. The overcharges averaged from 100% to more than 300% over the prevailing market price.

David Wagner, 55, the head of Downing Partners LLC, pleaded guilty to charges that he ran a Ponzi-like scheme. He solicited more than $8 million from investors and represented that Downing Partners was a venture capital firm that would invest in health care startups, in addition to providing sales, operations and management expertise to those companies.

Lewis I. Wallach was charged by the SEC with stealing $26 million in an alleged Ponzi scheme. Wallach and the deceased founder of Professional Financial Investors Inc. raised approximately $330 million from more than 1,300 investors. Criminal charges were also filed against Wallach.

David Wade Watson, 62, and Rajshree Patel, 45, of Florida, were arrested on allegations that they were running a $2.5 million Ponzi scheme. Watson told him victims that he was awaiting billions of dollars in settlements from the government and that he would pay them millions or billions of dollars for every $1,000 they invested.  

INTERNATIONAL PONZI SCHEME NEWS 

Australia

John Louis Anthony Bigatton was banned for 7 years from the securities industry due to his involvement in the BitConnect Lending Platform alleged Ponzi scheme. Bigatton was accused of being engaged in misleading or deceptive conduct in promoting Bitconnect.

China

Chen Shaofeng, Luu Jianghua, Lu Jianghua, Lu Qinghai, Jin Xinghai, Wang Yin, and Zhang Qin were charged in connection with the PlusToken Ponzi scheme. The scheme is a $5.8 billion cryptocurrency scheme.

Dominican Republic

Charles Paul Vincent Debono, 62, was arrested and deported to Canada where he faces charges relating to an alleged Ponzi scheme. The scheme laundered money through investments in hotels and fast food centers as well as in the purchase of luxury vehicles and real estate. Debono’s wife, Sol Esperanza Acosta Gonzalez, was also arrested. The scheme was run through a company called Debit Direct.

England

Joseph Lewis pleaded guilty to charges that he defrauded investors worldwide in an international investment scam. Lewis ran the scam from Turkey and told investors he was engaged in foreign exchange trading. The scheme took in about $27 million. 

Guyana

Yuri Garcia Dominguez, 34, a Cuban national and his wife, Ateeka Ishmael, 32, were charged on 10 additional charges relating to an alleged Ponzi scheme run through Accelerated Capital Firm Inc.

India

Popular Finance was exposed as a Ponzi scheme when investors started withdrawing their money due to the pandemic and related financial stress. Thomas Daniel Roy and his wife Prabba surrendered and their daughter, Rinu Mariam Thomas, was arrested.

Taluk LC Nagaraj and Manjunath N were charged in connection with the I-Monetary Advisory Ponzi scheme case, headed by Mansoor Khan.  

Philippines

Authorities identified Mining City as a Ponzi scheme and identified Gregory Rogowski, Anthony Aguilar and Jhon Rey Grey as key personnel involved in the scheme. The scheme is a bitcoin cloud mining company.

Spain

Arbicorp froze accounts of more than 120,000 investors after discovery of an error that caused one of its cryptocurrency bots to overpay. It claims that its trading bot called Community Bot paid 28% more in profits than were due. 


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.