Posted by Kathy Bazoian Phelps
Below is a summary of the activity reported for October 2022. New Ponzi schemes and lots of prison sentences dominated the Ponzi scheme news this month. There were at least 7 new schemes reported worldwide and 101 years of prison sentences were imposed. The average age for the alleged Ponzi schemers was approximately 52. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
John Acker, 53, of Florida, was sentenced to 11 years in prison and ordered to pay $3.2 million in restitution in connection with a $4 million scheme that he ran through shell companies including Miracle Strip Holdings X LLC, Miracle Strip Holdings XV LLC, Fujimo Development LLC, and Shipwreck Road LLC.
Michael Atkins, 49, is being held in custody in Ohio as authorities seek to extradite him to Singapore in connection with an alleged $4 million Ponzi scheme. Atkins is one of three directors of Aureus Capital, a foreign exchange trader in Singapore. The scheme promised returns of 40% to 50%. Atkins had fled Singapore by obtaining a new passport at the U.S. Embassy in Jakarta after his original passport had been taken by Singaporean authorities,
Darrek Arnold Aviss, 64, of California, was sentenced to 11 years and one month in prison and ordered to pay about $14.5 million in restitution in connection with a scheme that stole about $14 million. The scheme involved the purchase of annuities from insurance companies based in Switzerland and promised interest rates ranging from 5% to 7%.
Vania May Bell, 57, of New Jersey, was sentenced to 6½ years in prison and ordered to pay about $8 million in restitution in connection with the scheme run through Executive Compensation Planners. Bell helped run the scheme with her father, Hector May. The scheme involved more than $11 million stolen from 15 clients. May is currently serving a 13-year prison sentence.
Joshua Burrell, 39, was sentenced to 4 years in prison and ordered to pay $5 million in restitution in connection with a scheme that brought in $6.3 million from 14 investors. The scheme was run through Activated Capital.
Mauricio Chavez, 41, of Texas, was sued by the SEC in connection with his company, CryptoFX, which he founded with Giorgio Benvenuto, 55. The SEC alleges that Chavez was running a Ponzi scheme that defrauded 5,000 investors, mostly in the Latino community. Chavez represented that investors could earn back half their investment in profits in 3 months and 90% in six months. The scheme raised more than $12 million but only $1 million was invested in crypto assets. Most of the money went to buy real estate, was used for personal expenses, and was diverted to their company, CBT Group.
Michael J. DaCorta, 57, of Florida, was sentenced to 23 years in prison in connection the scheme run through Oasis International Group, Ltd. At least 700 investors lost more than $80 million in the scheme. Investor were told the investments were risk-free and that OASIS was profiting by being a “market maker” and collecting “spread” on FOREX trades. In fact, Oasis had no true revenue. DaCorta used investor funds to buy a Maserati and Range Rovers for his family members, a country club membership, multiple million-dollar homes in Florida, college tuition for family members, flights on private jets, and vacations.
Ray E. Grabato II, 43, Daniel Coley O’Brien, Thomas Nicholas Salzano, 64, and Arther S. Scuttaro, 62, along with the New Jersey-based company, National Realty Investment Advisors, LLC (NRIA), were charged by the SEC in connection with an alleged scheme that raised approximately $650 million from about 2,000 investors. The scheme promised investors returns of up to 20% from the supposed purchase and development of real estate properties. Olena Budinska and Jamie Samul aka Jamie Samul Salzano were named as relief defendants. The real estate fund was operated through NRIA Partners Portfolio Fund I LLC. Salzano, Scuttaro, and Grabato were criminally charged. Scuttaro pleaded guilty.
Arley Ray Johnson, 63, or Maryland, was convicted in connection with a $28 million Ponzi scheme run through The Smart Partners LLC dba 1st Million and 1st Million Dollars. Co-defendant Dennis Mbongeni Jali fled the country but has since been arrested in South Africa, and co-defendant John Erasmus Frimpong, 42, previously pleaded guilty. 1st Million held itself out as a wealth management and financial literacy company and offered a 12-month guaranteed investment contracts called “Corporate Guarantees.” Monthly returns of 6% to 35% were promised to investors, and more than 1,200 investors were defrauded.
Anna Kline fka Jordana Weber, 33, of New Jersey, was indicted on charges relating to all alleged $7 million advance fee Ponzi scheme. Kline owned and operated several companies that purported to loan money to small business in high value loans, often in excess of $100 million. A fee of up to 5% of the potential loan amount was charged as a “fee” prior to the loan being funded. Kline used the fees for personal expenses, along with her significant other, Jason Torres.
Ari J. Lauer was sued by the SEC in connection with the DC Solar Solutions Ponzi scheme. The SEC alleges that Lauer deceived investors and help run the fraudulent scheme that brought in more than $910 million of investor funds. Lauer was paid more than $4.4 million in ill-gotten gains. Lauer was allegedly aware of the lack of legitimate lease revenue and provided false financial information to at least one investor. Owners Jeffrey Carpoff, 51, and Paulette Carpoff, 48, were sentenced to 30 years and 11 years, respectively.
Andrew Middlebrooks, of Michigan, was charged with running an alleged Ponzi scheme through EIA All Weather Alpha Fund Partners. He developed a specialized research program to analyze stocks and funds in real time but was unable to produce the returns promised to investors. Middlebrook reported positive returns of 135.74% when he knew EIA had incurred losses over $13 million. The alleged losses to at least 100 investors exceeded $27 million.
Richard Lee Ramirez, 53, of California, was indicted on charges that he was running a “Ponzi-style” scheme through his company, JMJ Capital Group. The alleged scheme brought in at least $8 million from investors, promising returns of 10% to 14% within 90 days based on the supposed purchase and resale of personal protective equipment (PPE), factoring of accounts receivable, imports of furniture, and refurbishment of cruise ship air-conditioning units. Instead, Ramirez used the funds to pay for luxury cars, travel, other personal expenses, and to pay other investors. He allegedly stole at least $5 million of the $8 million he received from investors.
Perry Santillo, 42, of Pennsylvania, was sentenced to 20 years in prison in connection with the Ponzi scheme run through First Nationle Solution LLC, Percipience Global Corporation, and United RL Capital Services LLC. The business reportedly used several names including Advice and Life Group, Poconos Investments, First American Securities and Financial Planners Group of America. Santillo admitted in his plea agreement that he took in approximately $115 million from investors who lost $70.7 million.
Trendon Shavers, of Texas, was ordered imprisoned for civil contempt after he refused to produce certain documents and payments to the SEC. Shavers and his company, Bitcoin Savings and Trust, were previously sued by the SEC on allegations that they were running a bitcoin Ponzi scheme. Separately, Shavers pleaded guilty to criminal fraud charges.
Stephen Romney Swensen, deceased, was sued by the SEC in Utah along with others in connection with a Ponzi scheme that defrauded more than 50 investors out of more than $29 million. Investors placed their money with Crew Capital Group LLC, a Nevada entity, and were promised returns between 5% and 10%. Crew Capital did not purchase any securities with the money, but Swensen siphoned off the money for his own expenses instead. Clients were given false documents showing Pacific Investment Management Company as a subadvisor to Crew Capital. The SEC alleges that Crew Capital continues to display false information to investors on its website and the investor funds sent to Crew Capital is now being spent and dissipated.
David Varrone, 56, and his wife Sherry Varrone, of Florida, were charged in connection with an alleged scheme run through The Credit Engineers Inc. that took in approximately $6.4 million. The scheme was a credit leasing scheme in which individuals with good credit were offered a short-term “Credit Leasing” investment program that was tied to a purported hedge fund that would pay a guaranteed return and fully repay the loans within 3 years or less. The Varrones helped victims apply for the high interest, short-terms loans and then “lease” the proceeds to The Credit Engineers.
INTERNATIONAL PONZI SCHEME NEWS
Brazil
Authorities raided 20 addressed linked to the crypto fraud network controlled by Francisco Valdevino da Silva aka “Sheikh dos Bitcoins.” The scheme promised returns of up to 20% and took about $766 million from thousands of investors.
Canada
Sabrina Ling Huei Wei, James Bernard Law, and Justin Colin Villarin were found to have conspired in securities violations in connection with a scheme run through DFRF Enterprises LLC that was promoted by Daniel Fernandes Rojo Filho. They were found to have actively solicited investors on DFRF’s behalf when they knew or should have known that Filho was running a fraudulent scheme. The scheme promised investors returns from gold mining operations in Africa and Brazil that did not actually exist.
Larry Renton, who was being investigated for running a Ponzi scheme through The Miami Group, passed away. Renton was 58 and was a retired police officer who had allegedly defrauded friends and fellow officers.
England
David Ames,70, was sentenced to 12 years in prison in connection with a Ponzi scheme that defrauded more than 8,000 investors out of £398 million. The scheme involved luxury Caribbean holiday homes and was run through Harlequin Group, a hotel and resort development venture. Harlequin sold about 9,000 property units to investors, but fewer than 200 were actually built.
Abdul Mukith, 42, was sentenced to 8½ years in jail in connection with a scheme run with four others through Essex and London Properties Ltd, which falsely claimed to refurbish properties along the Elizabeth Line.
PGI Global U.K. was shut down after it allegedly defrauded investors out of about $709,000. Investors were promised returns of up to 200%. PGI is part of Praetorian Group International Trading, which was shut down by the U.S. Department of Justice.
India
The crypto trading app, Ece Limited, vanished and is being investigated by authorities. The platform had more than 19,000 members. Ece claimed to be a U.S.-based firm and gave a $200 bonus to those who brought in new investors.
Jaydeep Raha, the managing director of Jetex Ocenair Pvt Ltd. was arrested on allegations he was running a fraudulent scheme in which Rs 1.83 crore were diverted to the account of OAK India Multistate Credit Co-operative Society of which Raha is the current managing director.
Pradeep Sethy was sentenced to 5 years in prison in connection with a Ponzi scheme run through Artha Tatwa Group.
Sanjay Kumar Singh was arrested on allegations that he colluded with Soumyarp Bhowmik in connection with a Ponzi scheme run through Sunmarg Welfare Organisation.
Sri Lanka
Five individuals, including Shamal Keerthi Bandara and Zhang Kai, were arrested in connection with a cryptocurrency Ponzi scheme called Sports Chain, which was supposedly a cryptocurrency investment platform. Investors were directed to transfer their “Sports Chain coins” to an option called the “Power Pool” where the coins would supposedly be multiplied times 5.
Uganda
BLQ Football Club shut down after cause losses that are believed to be greater than Shs60 billion.
