Posted by Kathy Bazoian Phelps
Below is a summary of Ponzi scheme activity reported for September 2023. At least 13 new Ponzi schemes came to light this month. More than 94 years of prison sentences were imposed on Ponzi schemers, and the average age of the fraudsters was about 49 years old. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
Monise François Bien Aimé of Florida and her company MFB 111 Investment LLC were charged by the SEC in connection with an alleged $1.8 million Ponzi scheme that targeted the Haitian American community. The scheme ran from 2021 to 2022 and defrauded at least 170 investors.
Stephen I. Bailey and his companies, Sapphire Exploration LLC and Harris Exploration, Inc., were charged by the SEC in connection with an alleged oil and gas Ponzi-like scheme that misappropriated $5 million of the $7.8 million raised from investors.
Bin Hao, 48, and his company, Qidan LLC, a Virginia limited liability company, were charged by the SEC in connection with an alleged fraudulent scheme that raised approximately $10.3 million from at least 60 investors. The scheme, which promised returns of 8% to 25%, targeted the Chinese-American community predominantly in Virginia and Maryland. Investors were promised returns from a Miami-based real estate company.
Gary J. Dragul, 60, of Colorado, was sentenced to 120 days in jail in connection with a scheme run through GDA Real Estate Services. Dragul pleaded guilty earlier this year. The scheme misrepresented that returns would be paid from a shopping center project. Marlin Hershey and Dana Bradley were also charged in connection with the scheme.
Joe Firmage was sued on allegations that he was running a Ponzi scheme involving more than $25 million. Firmage represented that he had devised a new aerospace propulsion technology concept and needed financing for the lab operations until the government contracts were ready to be disbursed.
Tyler G. Gallagher, Leah Donoso, and their company, Regal Assets LLC, were charged by the CFTC and the California Department of Financial Protection and Innovation in connection with an alleged fraudulent $21 million scheme. Regal Assets is a California-based precious metals dealer, and the defendants are accused of diverting funds intended for the purchase of precious metals to pay personal expenses.
Karl Sebastian Greenwood, 46, the co-founder of the OneCoin cryptocurrency Ponzi scheme, was sentenced to 20 years in prison. His partner, Ruja Ignatova, 43, remains at large. OneCoin began in Bulgaria and brought in more than $4 billion from at least 3.5 million people between 2014 and 2016. Greenwood personally made $300 million from the scheme.
Pavel Ramon Ruiz Hernandez aka Pavel Ruiz, 30, of Florida, was sentenced to 9 years and 2 months in prison in connection with a Ponzi scheme run through MJ Capital Funding LLC. Ruiz solicited funds and promised returns from the funding merchant cash advances, a type of short-term financing used by small and medium-sized businesses. Ruiz brought in over $42.9 million into the scheme that involved $190 million. The MJ Capital scheme was run by Johanna Garcia who has been charged by the SEC. The SEC also sued Steven Fernandez, Monica O'Mealia, Christian Cuesta, and Nathalia Burgos in connection with the scheme, alleging that they deceived investors in helping to raise money for MJ Capital.
Rolf Max Hirschmann aka Max Bergmann was sued along with WeedGenics, Integrated National Resources Inc. in connection with an alleged $62 million Ponzi-like scheme that defrauded approximately 350 investors. WeedGenics offered returns from a supposed marijuana investment opportunity but never owned or operated a cultivation facility as represented. WeedGenics executive is Patrick Earl Williams, a rapper known as “BigRigBaby,” who allegedly spent investor funds on his music career.
Robert J. Jesenik, 63, the former CEO of Aequitas Capital Management, was sentenced to 14 years in prison; Andrew N. MacRitchie, 59, the former executive VP was sentenced to 5 years and 10 months; and Brian K. Rice, 56, an executive VP, was sentenced to 3 years and 1 month in connection with the scheme. The scheme defrauded investors out of $300 million.
Jon Patrick Kubler, Aksarben Evolution, LLC, AV Bhill, LLC, CFH Texas, LLC, Green Saddle, LLC, and Kubler Consulting, LLC, along with relief defendants, Kubler Financial, Inc. and Midwest PEG, LLC, were sued by the SEC in connection with an alleged fraudulent scheme that defrauded at least 56 investors out of approximately $5.6 million. The defendants promised returns from investment opportunities, primarily in commercial real estate, but only a small amount was actually invested.
William Logsdon, 55, of Texas, was sentenced to 9 years in prison for his role in running a Ponzi scheme with his mother-in-law, Jamie Thompson. Thompson had previously pleaded guilty and was sentenced to 5 years in prison. Logsdan is a lacrosse coach and teacher and persuaded members of his community and family to invest in royalty interests for oil, gas and mineral projects in Texas and New Mexico. The scheme was run through National Royalty Group, or NRG. More than 20 victims were defrauded out of more than $2.1 million.
Muhammad Murtuza Kazmi, MyForex Funds, and Traders Global Group Inc. were sued by the CFTC. The firm claimed to be a retail foreign exchange and commodities trading firm and it took in around $300 million from investors around the world.
Mirror Trading International was ordered to pay $1.7 billion in restitution in connection with the fraudulent scheme run through the company and by its CEO, Cornelius Steynberg. Almost 30,000 bitcoins were collected from over 23,000 investors in a supposed commodity pool.
Matthew M. Motil, 43, host of “The Cash Flow King” podcast, was charged by the SEC on allegations that he was running an $11 million Ponzi scheme that defrauded more than 50 people. Motil promised returns from promissory notes that he represented were backed by first mortgages on homes in Ohio. Motil told investors he would renovate, sell, refinance, or rent the properties to generate returns. He allegedly sold the same property to many investors and, in one instance, sold notes to 20 different investors and raised $1.3 million for a property he bought for $47,000.
Marco Ruiz Ochoa, 35, pleaded guilty to charges in connection with the cryptocurrency IcomTech Ponzi scheme. Ochoa was the CEO of the scheme that promised daily returns from a purported cryptocurrency mining and trading business. Carmona Juan Arellano, Moses Valdez, and David Brend were also charged in connection with the scheme.
Pablo Renato Rodriguez, 40, was sentenced to 12 years in prison in connection with the AirBit Club which he co-founded with Gutemberg Dos Santos, 48. Santos and other co-defendants, Soctt Hughes, 47, Celilia Millan, 41, and Karina Chairez, 47, have pleaded guilty. The scheme defrauded investors out of about $100 million.
Armando Gutierrez Rosas and Aras Investment Business Group S.A.P.I de C.V. were charged by the SEC in Texas with fraudulently raising at least $15 million from more than 450 investors. Efren Quiroz, Luis Quiroz, Maria Tolentino, and Diayanira Rendon were also charged for their roles in the alleged fraud. Aras is a Mexico-based company, and the scheme targeted members of the Mexican American community. The scheme promised returns as high as 10% from investments in U.S. real estate and mining operations in Mexico. The funds were not used for investment purposes, and Gutierrez instead used funds for personal expenses including a $2.5 million mansion in Texas.
Michelle Silverstein aka Michelle Silverstein Bisnoff and her company Esos Rings, Inc., were charged by the SEC in connection with an alleged Ponzi-like scheme. They raised $1.95 million from investors for investments in a company that allegedly manufactured and sold wearable rings which functioned as debit cards. They claimed that they owned patents for the smart rings and that Apple was supposedly in the process of buying their company.
Walker Sumchai, 61, of California, was charged by the SEC in connection an alleged scheme that raised over $13 million from more than 1,000 investors in the Tongan American community. Investors were sold shares in “Tongi Tupe” which Sumchai represented used a secret algorithm to generate guaranteed high returns. Sumchai promised at least a $146,000 return in 16 weeks on a $3,000 investment. The SEC alleged that in reality Tongi Tupe did not generate any returns but that Sumchai was operating a Ponzi scheme.
The estate of Stephen Romney Swensen, Crew Capital Group LLC, Wendy Swensen, Swensen Capital LLC and Wingman LLC settled claims with the SEC relating to an alleged Ponzi scheme run by the deceased Swensen. The SEC had alleged that Swensen ran the scheme from 2011 through his death in 2022 and that he defrauded more than 50 people out of at least $29.3 million. The scheme solicited funds into Crew Capital, which was supposedly a fund that invested in bank loans and options on the S&P 500 index with guaranteed minimum returns of 5% to 10% annually. Two other defendants in the action, Saria C. Rodriguez and WS Family IP LLC, have not settled.
Evan Daniel Tromp, 37, was charged in connection with his operations of various company as an alleged Ponzi scheme. The scheme was run through Quanta Capital B.V., Operational and Financial Advisory, LLC, and Quanta Nominee, LLC. Investors were promised high returns from investments in cryptocurrency mining and trading with virtually no risk.
Robert Wisnicki, 44, of New York pleaded guilty to charges in connection with his operation of an $18.8 million Ponzi scheme in which investors invested in real estate through his law firms, Wisnicki & Associates and Wisnicki Neuhauser LLP. Wisnicki used funds from his firm’s IOLA accounts for noninvestors to cover losses for other clients who had invested in the recommended real estate investments. Wisnicki also took part in an auto insurance fraudulent scheme by laundering proceeds of the scheme.
INTERNATIONAL PONZI SCHEME NEWS
Canada
Greg Martel was ordered into a personal bankruptcy in connection with proceedings relating to an estimated $226 million run through his company, Shop Your Own Mortgage aka My Mortgage Auction Corp. The scheme involved supposed short term bridge loans to real estate developers, and nearly 1,200 investors were promised returns as high at 100% per year. Martel’s whereabouts remain unknown. Martel was also found guilty of civil contempt in connection with the matter.
Curtis Gordon Quigley, 56, and Kathleen Treadgold, 56, were charged in connection with an alleged Ponzi scheme that took $7.8 million from investors. The scheme was run through Group Venture Inc. and ran from 2008 to 2020, and investors were given promissory notes that guaranteed a return on their investment.
England
Kenneth Campell was banned from running a business for 14 years following an investigation into his scheme run through HGEC Capital Ltd. The losses to investors were £2.8 million. Investors were told that they were investing in an oil and gas venture in Texas.
India
Authorities are on the lookout for 3 Chinese nationals known as Liu Huan, Wenhui Zheng, and Xu Xiaohu. They are associates of Guanhau Wang, 40, the master mind of the scheme run through 14 companies engaged in cyber-financial frauds.
Dharmendra Sandu was arrested in connection with the Pearls Agrotech Corporation Ltd. Ponzi scheme. Hirdaypal Singh Dhillon, Sandeep Singh Mahal, and Sandhu were all removed as directors as they had allegedly submitted forced documents.
Agri Gold promoters AV Rama Rao, Seshanaryana Rao, and Hemasundara Varaprasad were charged in connection with the scheme.
The assets of Ashesh Mehta and his spouse were frozen in connection with an alleged Ponzi scheme run through Bliss Consultants, led by Krishna Hegde. The scheme defrauded over 4,000 investors and promised investors 2.5% profits per month. Mehta and his wife have gone into hiding.
Prabhat Ranjan Biswal and his wife Laxmi Bilasini Biswal were charged in connection with the Seashore Group Ponzi scheme.
Philippines
Authorities issued a warning about Sprhy Gold Investment/Sprhy Cash Paluwagan stating that it has the characteristics of a Ponzi scheme. Sprhy Gold allegedly solicits investments at a minimum of P5,000 up to P500,000, which is supposed to earn 15% up to 30% after 30 days.
