Posted by Kathy Bazoian Phelps
Below is a summary of Ponzi scheme activity reported for March 2023. This month revealed at least 13 new Ponzi schemes, 5 guilty pleas and over 30 years of new prison sentences. The average age for the alleged Ponzi schemers was approximately 48. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
Matthew Beasley, 50, was indicted on charges relating to an alleged Ponzi scheme that took in about $460 million from more than 600 investors. Beasley was charged last year with one count of assault on a federal officer for pointing a gun at an FBI agent when investigating Beasley. The scheme involved the supposed purchase of insurance tort settlements where plaintiffs in personal injury lawsuits wanted to borrow money against their pending settlements with insurance companies. Investors were promised returns of at least 12.5% every 90 days. Beasley used the money to buy luxury homes, cars, and to pay for other personal expenses.
Wynn Charlesbois was indicted on new charges relating to an alleged Ponzi scheme that defrauded at least 39 investors out of $5.3 million. Charlesbois has pleaded not guilty to charges that he ran a Ponzi scheme involving loans, subscription agreements, co-investments, and participation investments.
Ryan Crawford aka Brody, 30, of Florida was charged in connection with an alleged scheme that took in $800,000 from investors. Crawford was to invest the funds in cryptocurrency and stocks, but instead spent the money on luxury rental cars and gambling.
Garrett Elder, 30, of Alaska, was criminally charged in connection with a scheme run through Tycoon Trading LLC, The Daily Bread Fund, LLC, and other related entities. Authorities allege that they defrauded 130 investors out of approximately $25 million. Elder brought in about $30 million of investor funds, representing he was making money in securities and foreign currencies. He allegedly used some of the money to buy himself real estate, a boar, a camper and jewelry, among other things.
Yossi Engel, 35, was indicted on charges that he ran a $47 million Ponzi scheme that defrauded mostly Orthodox Jews. Engel had fled to Israel in 2021 but was arrested in Los Angeles this month. Engel promised returns from his company iWitness Tech the supposed purchase and installation of security cameras as a means of protection as antisemitic incidents were rising in the U.S. He also said he would use their funds to purchase renovate and sell property in Israel.
John Erasmus Frimpong, 42, was sentenced to 10 years in prison and Arley Ray Johnson, 63, was sentenced to 6 years in connection with a $28 million Ponzi scheme. The third co-conspirator, Dennis Jali, fled to South Africa in 2019. The three were pastors who ran a fictitious financial literacy and wealth management firm called The Smart Partners LLC, doing business as 1st Million LLC or 1st Million Dollars. The scheme promised investors monthly returns as high as 35% in foreign exchange and cryptocurrency ventures. At least 1,200 investors were defrauded.
Daniel Eric Jay, 46, pleaded guilty to charges that he worked with reality TV star Maurice Fayne aka Arkansas Mo, 39, and others to run a Ponzi scheme through Flame Trucking LLC. The scheme defrauded more than 20 people. Jay also assisted Fayne in obtaining a $3.7 million Paycheck Protection Program loan by providing false financial information with the loan application.
Min Woo Kang aka Kevin Kang, of Florida, and BKCoin Management LLC were sued by the SEC and the subject of an asset freeze, as revealed in unsealed court documents. The scheme involved $100 million taken from 55 investors, and the asset freeze also involved BKCoin Capital; BK Offshore Fund, Ltd.; BKCoin Multi-Strategy Master Fund, Ltd.; BKCoin Multi-Strategy Fund, LP; BKCoin Multi-Strategy Fund Ltd.; and Bison Digital LLC. Investors were told their funds would be used for crypto asset trading. The SEC is seeking disgorgement from Bison Digital LLC, which allegedly received $12 million from the investors.
Gregory D. Lone, 55, was sentenced to 8 years in connection with a Ponzi scheme run through Paramount Financial Advisors from 2016 through 2019.
Aaron Cain McKnight, 48, and his entities, BPM Global Investments LLC and BPM Asset Management LLC were charged by the SEC in connection with an alleged Ponzi scheme that defrauded at least 28 investors out of more than $8.4 million. The complaint also charges Sherry Rebekka Sims, Harmony Brooke McKnight, Kenneth Miller, 72, and Frost & Miller with aiding and abetting certain of the alleged violations, and names Timothy Neher and his company, Accelerated Venture Partners, LLC, as relief defendants.
Franklin Ray, 51, of Michigan, pleaded guilty to charges relating to a $40 million Ponzi scheme run through his trucking business known as CSA Business Solutions LLC. Ray promised investors 77% of the net income from the operations of trucks that would perform delivery services for multinational e-commerce and shipping companies. Approximately 275 investors invested in the scheme. Ray claimed to have purchased over 2,00 trucks with the investors’ funds but in reality only operated a few trucks and had minimal revenue from trucking activities.
Pablo Renato Rodriguez pleaded guilty to charges relating to a crypto Ponzi scheme run through AirBit Club. AirBit was a purported cryptocurrency mining and trading platform and brought in more than $100 million. Gutemberg Dos Santos pleaded guilty in 2021. Scott Hughes, Cecilia Millan, Karina Chairez, and Jackie Aguilar have also pleaded guilty in connection with the scheme.
David Schamens, 65, of North Carolina, was indicted in connection with an alleged $7 million Ponzi scheme run through TD Trading LLC, TFG Trading Fund LLC, Tradestream Analytics LTD, Tradedesk Financial Group Inc., and others. Schamens promised returns of 12% to 30% from investments in Tradestream Algo Fund, an algorithm-based trading pool. The scheme defrauded at least 25 individuals out of approximately $7 million.
Noel Strachan, of Florida, was indicted on charges that he, along with 10 others, defrauded thousands of Jamaicans out of hundreds of millions of dollars. Strachan, ran the scheme along with Omar Etayem aka Omar Rivera, Odain March, Yegisibet Benli aka Lisa Benli, Yunior Muro, Michael Pardos aka Mario Cruise aka Gangster Mike, Anthony Jonas, Javier Arguelles aka Cuba, Marlon Foster, Demal Cheeks, and Derrol Scafe. They stole or fraudulently obtained high end vehicles and either sold them or used them as collateral for loans. Strachan is the former head of now-defunct Worldwise Partners, that ran an unregulated alternative investment scheme over a decade ago.
David J. Varrone, 56, was sentenced to 9 years in prison after pleading guilty to a Ponzi scheme in which he defrauded more than 40 investors out of about $3 million. His wife, Sherry D. Varrone, also pleaded guilty to her role in the scheme. The scheme was run through The Credit Engineers, Inc. from 2018 to 2021 and offered returns to investors from short-term investments linked to hedge funds. Varrone helped investors apply for high-interest, short-term loans and then the victims leased the proceeds to Varrone and his business.
Stephen Keith Woodard, Sr., of Hawaii was charged by the SEC in connection with an alleged Ponzi scheme that he was running as an unregistered investment adviser. Woodard raised approximately $6 million from about 30 investors who purchased promissory notes from Morganwood Ltd. Woodard promised a risk-free trading strategy.
John J. Woods, 58, of Georgia, was charged and pleaded guilty to a Ponzi scheme run through Horizon Private Equity III that brought in more than $110 million from more than 400 investors. A final judgment was also entered against Woods in an action by the SEC that was brought in 2021. Woods used Horizon to purchase investment advisor, Livingston Group Asset Management Company dba Southport Capital. Woods had promised investors 6% to 7% annual interest paid in monthly installments, and investors lost over $25 million in the scheme.
INTERNATIONAL PONZI SCHEME NEWS
Canada
Sabrina Ling Huei Wei, Justin Colin Villarin and James Bernard Law were ordered to pay $1.5 million in sanctions and were banned from the securities industry in connection a $15 million Ponzi run through DFRF Enterprises LLC that defrauded more than 1,400 investors. Investors had been promised returns from supposed gold-mining operations in Mali and Brazil.
England
Anthony Constantinou was accused of running a Ponzi scheme through Capital World Markets Ltd. that defrauded investors out of $61.7 million.
Egypt
Authorities arrested 29 people in an alleged criminal network that stole LE 19 million through a cloud mining scam called HoggPool. The HoggPool platform supposedly invested in cryptocurrency mining activities and promised users the possibility to rent “mining machines” to receive a daily profit of around 10%.
India
Harchand Singh Gill, a director of the Pearls Group, was arrested in connection with the Ponzi scheme founded by Nirmal Singh Bhangoo. The scheme had involved promising investors land in exchange for their investments, and over Rs 60,000 was stolen from investors. Gill was the director and shareholder of PGF, a Pearls Group Company.
Authorities raided 15 locations in connection with an alleged Ponzi scheme run by Lokesh Jain and Karthik Jain. The scheme promised 12% returns and ran from 2005 to 2016.
Authorities are looking for Md. Saif, a man accused of running an international Ponzi scheme. Rustam Khan and Md. Hakim, the directors of Hakim and Rustam Fabrics Private Limited, were arrested in February. The scheme involved a betting app known as “18football.com.” Naveen Poriwar, the head of Edudaddy Institute of Advanced Studies Private Limited, was arrested in connection with the online betting scheme.
Akshay Sanjay Dhanuka, 32, was arrested in connection with an alleged online Ponzi scheme that brought in more than Rs 40 crore in 10 days.
Israel
Michael Ben-Ari aka Michael Greenfeld was convicted in connection the operation of a $150 million Ponzi scheme run through EGFE Israel Ltd. that defrauded 1,000 investors in both the U.S. and Israel. He has been dubbed “the Israeli Madoff.”
Nigeria
Barmise Samson Ajetunmobi, the owner of Imagine Global Holding Company Ltd. and Imagine Global Solutions was arrested while trying to board a flight to the U.K. Barmise and his wife, Elizabeth Ajetunmobi, allegedly defrauded investors out billions of naira. They promised investors 10% returns monthly from supposed microloans to small and medium-sized companies and low-income workers in Africa. They used their company, TFS Finance Ltd., to lure in over 90,000 investors.
Scotland
Alistair Greig, 69, was jailed in connection with a £13m fraud. Greig had represented that he would place money in a short-term deposit scheme with the Royal Bank of Scotland for fixed periods of time. A total of 165 victims were identified. Greig used the money on a holiday home, a classic car business, and a Bentley and Range Rover, among other things.
Vietnam
Management of Hanoi firm Bankland were arrested on allegations that they defrauded 4,000 people in a Ponzi scheme. Chairman Quan Van Duong, CEO Nguyen This Nhu, Vu Due Tinh, Nguyen Due Minh, and Nguyen Van Minh were arrested in connection with the scheme. The company represented that it was a property developer and car trader and promised returns of 43.2%. In reality, the company did not do any business.
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