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, November 30, 2020

November 2020 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for November 2020. The reported stories reflect at least 9 new Ponzi schemes worldwide, 1 guilty plea, over 34 years of prison sentences, and an average age of approximately 60 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Joseph S. Anile II, 56, was sentenced to 10 years and prison and ordered to pay $3.2 million in restitution in connection with the Oasis International Group Ponzi scheme that defrauded investors out of $72 million. The scheme involved foreign exchange trading that defrauded at least 700 investors. 

Keith T. Ashley, 48, was indicted in connection with the death of James Seegan. Ashley is accused of staging Seegan’s death to look like a suicide. Ashley is believed to have been operating a Ponzi-type scheme and was Seegan’s financial advisor. Authorities believe he may have murdered Seegan in an attempt to gain control of Seegan’s finances.

Thomas Joseph Becker, 72, and John Frank Thomas III aka John Frank, Johnathan West, John Frank Rodgers, John Marshall, and John Edwards, 75, were arrested on charges that they defrauded more than 600 investors out of about $30 million. The pair from Las Vegas used the following entities to defraud investors: Sports Psychometrics, the Vegas Basketball Club, Vegas Football Club, Einstein Sports Advisory, Quantum Sports Advisory, Wellington Sports Club, and Welscorp Inc. They claimed that their “special insights” could generate up to 180% on $100 bets. The loss to investors is estimated to be at least $9 million. 

James T. Booth, 75, was sentenced to 42 months in prison in connection with a Ponzi scheme that defrauded about 40 investors out of nearly $5 million. Booth solicited clients from Booth Financial and promised to invest their money outside of their ordinary advisory and brokerage accounts. He directed them to send money to Insurance Trends, Inc., which was owned by Booth.

Terrence Chalk aka Dr. Terrence Cash was arrested on charges that he defrauded investors out of more than $4 million by inducing them to invest in his wealth management business under false pretenses. Chalk ran the scheme through Greenlight Advantage Group Inc. and Greenlight Investment Partners. The SEC also filed a complaint against Chalk alleging that he raised about $5 million and that he misappropriated a large portion of the funds raised. 

Breonna Clark aka Eliot Clark or Alexander Pak, of Colorado, and Venture Capital Investments LLC were charged by the CTFC with running a Ponzi scheme through foreign exchange and cryptocurrency commodity pools. The alleged scheme solicited over $450,000 from over 72 clients. The defendants were ordered to pay about $900,000 in restitution and penalties.

Patrick O. Howard, 49, pleaded guilty to charges relating to a Ponzi scheme run through Insured Liquidity Partners CGF I, Insured Partners CGF II, and Capital Ventures, LLC. The scheme defrauded investors by promising them 12% annual returns and “insured liquidities.” Howard falsely represented that he was a registered investment advisor and that his companies had 20% annual returns. The scheme solicited $13 million from over 100 investors.

Bob Morgan agreed to settle charges brought by the SEC without admitting or denying charges that he defrauded more than 200 investors in 17 states. Morgan liquidated more than $66 million in assets and delivered the funds to a court-appointed receiver who repaid investors.  

Ash Narayan, 55, of California was sentenced to more than 3 years in prison and was ordered to pay $18.8 million in restitution and penalties. Narayan stole more than $30 million in savings from pro athletes, and he pleaded guilty last year to the scheme. He was an investment advisor at RGT Capital Management Ltd. and persuaded his clients to invest in The Ticket Reserve, an Illinois company that sold customers an option to buy a ticket to future sporting events that would allow them to “cash in” on playoff games if the team made it to the postseason. 

Joseph Nemeth and Jeremy Arrington, of Wisconsin, were charged with running a $2.8 million Ponzi-like scheme. The scheme was run through their company, Wisconsin Homebuyer’s Network, and investors were told that their money would be used to buy, renovate and rent or sell properties. 

Jonny Ngo, 34, of California, was sentenced to more than 6 years in prison and ordered to pay about $21 million in restitution in connection with a Ponzi scheme run through NL Technology, LLC. Ngo represented that NL Technology was supplying smartphone screens to buyers, and he prepared false financial and bank statements as part of his scheme.

Firoz Patel and his younger brother Ferhan Patel, of Montreal, were sentenced in connection with a Ponzi scheme run through their company, AlertPay. Firoz was sentenced to 52 months and Ferhan was sentenced to 2 years in prison. AlertPay was not licensed to operate in the U.S. but did so illegally, engaging in hundreds of millions of dollars of unlicensed transactions. The brothers are believed to have laundered about $250 million.

Matthew Piercey, 44, of California, was arrested after trying to escape underwater on a “sea scooter” for his role in an alleged $35 million Ponzi scheme. Piercey remained underwater for more than 25 minutes trying to evade FBI agents but was arrested when he came to the surface. Piercey is accused of running a Ponzi scheme with his business partner, Kenneth Winton, 67, through Family Wealth Legacy and Zolla. Winton was also separately charged. They promised investors guaranteed returns in cryptocurrency investments and are accused of lying about trading algorithms and the liquidity of investments.

Kenneth Murray Rossman, 62, and Phillip Roy Wasserman, 63, were indicted on charges that they defrauded mostly seniors out of at least $6.3 million in an alleged Ponzi scheme. Rossman is a certified public accountant and Wasserman is a former lawyer and licensed insurance agent, and they convinced elderly investors to invest in an insurance venture called FastLife. Victims were persuaded to liquidate previous investments and to borrow funds against existing life insurance policies to put into FastLife.

Craig Rumbaugh agreed to disgorge over $1 million to the SEC in connection with the SEC’s civil case against him. Rumbaugh is accused of running a Ponzi scheme through Rumbaugh Financial Inc. and Desert Strategic Equity LLC.

Chander Singh, 44, along with his parents Sooruh “Paul” Singh, 74, and Savitree “Joyce” Singh, 71, and brother Subhas “Brian” Singh, 50, were charged in connection with an alleged scheme run through SC Capitol Investors LLC. Family friend Chandrika “Basil” Singh, 71, was also charged. All of the defendants work as real estate agents and are accused of swindling as many as 30 investors out of $4.7 million by offering double digit returns on fake ventures.

INTERNATIONAL PONZI SCHEME NEWS 

Australia

John Louis Anthony Bigatton was charged in connection with a cryptocurrency scheme BitConnect that involved $2.5 billion. It is alleged that Bigatton operated an unlicensed management investment scheme as part of the broader BitConnect network.

Canada

Robin Forster was accused of running a Ponzi scheme through Qualia Care Developments and Qualia Care Properties. Investors were promised returns between 8% and 10%. Forster is a shareholder of Fortem Global whose only director is Richard Tasker. They are together believed to have been running the scheme.

Francesco Perre, 56, was charged on allegations that he was running a $1.3 million Ponzi scheme. Authorities alleged that Perre was running a stock market investment program and was using the victims’ funds for personal and financial gain.

China

Authorities seized more than $4.2 billion worth of crypto assets in connection with the Plustoken Ponzi scheme that defrauded over two million people. The Ponzi scheme collapsed in June 2019, and 109 people have been linked to the scheme. Of those, 15 have been convicted so far.

England

David Stevens, 67, was sentenced to five years and nine months in prison for his role in a $1.56 million Ponzi scheme. Stevens promised investors 12% returns through his financial firm, David Charles Financial Services.

India

Anand Tole, Pradip Maurya, Bhupendra Morada, Vinayak More, Raviprakash Gherade, Anand Sapkal, Anil Bhoir, and Milkeram Prajapati were arrested on allegations that they were running a Ponzi scheme through Smart Vision Products India Pvt. Ltd. The company’s directors, Pratiksha Mote and Rashmi Hirandandani are still at large.

R Roshan Baig was arrested in connection with the I-Monetary Advisory Ponzi scheme. The scheme was run by Mohammed Mansoor Khan who fled the country and accused Baig of cheating him. 

Zimbabwe

Mpumelelo Khaya Dube, 39, and Sithokozile Ndhlovu, 29, disappeared with about $2 million from an alleged scheme run through Kuwait Dinair Limited. The scheme allegedly involved $1.9 million. Their partner, Richard Boutros Samunda, was arrested and charged in connection with the alleged scheme. Samunda formed Bevern Capital for purposes of accepting deposits from investors.