By Kathy Bazoian Phelps
Below is a summary of Ponzi scheme activity reported for August 2024. There were at least 9 new Ponzi schemes revealed this month. Ponzi schemers received more than 111 years of prison sentences. The average age of the fraudsters was about 51 years old. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
Jonathan Adam, 42, of Texas, and his brother, Tanner Adam, 38, of Florida, and their firms GCZ Global LLC and Triten Financial Group LLC, were charged by the SEC in connection with an alleged cryptocurrency scheme. Investors were promised returns from loans to a crypto asset trading platform that used a “bot” to supposedly identify arbitrage trading opportunities. The scheme brought in $60 million from more than 80 investors and promised returns of 13.5%.
Bernardo Mendia-Alcaraz, 52, and his private equity firm, Toltec Capital LLC, were charged by the SEC in connection with an alleged $3.3 million Ponzi-like scheme. They promised returns from low-risk private funds.
Carl Arnal aka Michael J. Cohen, 65, Christopher Vaughan, Thompson Hunt and Associates, Ltd. (THA), Brookdale Consultants LLC, Growth Point Consultants, Inc., Damon Artis, and Richard Gavzie were charged by the SEC for their roles in two alleged fraudulent schemes. The scheme raised $1.3 million by misrepresenting the Thompson Hunt investment as a government bond. Arnal and Vaughan misappropriated more than $1 million of the $1.3 million raised. Artis and Gavzie were also accused of soliciting $7 million in selling microcap securities.
Janalie C. Bingham, of Florida, her convicted felon husband, Jean Joseph, and their company Wells Real Estate Investment, LLC, were charged by the SEC on allegations that they were running a Ponzi scheme that raised at least $56 million from approximately 660 investors. They represented that they had a $450 million real estate portfolio, but in reality, only $11 million was used to purchase real property. The scheme promised returns of 12% annually and 99% at the end of three years.
Russell Todd Burkhalter, 52, of Georgia, and his company Drive Planning LLC, were charged by the SEC in connection with an alleged $300 million real estate Ponzi scheme. The scheme brought in money from more than 2,000 investors, promising returns of 10% every three months from land development projects. Burkhalter allegedly used investors funds to buy a $3.1 million yacht, $2 million for a luxury condo, and spent $4.6 million on chartering private jets. Burkhalter’s wife, Jacqueline Burkhalter, and The Burkhalter Ranch Corporation, Drive Properties, Drive Gulfport Properties, and TBR Supply House were also named as relief defendants.
Robert Christensen, 54, and Anthony Matic, 55, of Oregon, were indicted on charges relating to an alleged Ponzi scheme in which investors were promised returns from the supposed renovation and sale of undervalued residential properties. They promised returns of 8% to 15% within 30 to 90 days. The scheme defrauded investors out of about $11 million, and commercial lenders out of around $7 million. Christensen and Matic pleaded not guilty. In 2023, the SEC had accused them of running a Ponzi-like scheme through their businesses Foresee Inc., The Commission PDX LLC, The Policy PDX LLC, and Innings 150 LLC.
Kalin Thanh Dao, 32, of Minnesota was charged in connection with a fraudulent investment ring that defrauded more than 200 investors out of more than $10 million. Her father, Nghia Trong Dao, and mother, Thu Nguyet Le Dao, also face charges relating to the scheme. The scheme was run through TD Financial Services, NLC TD Financial Services, NLC Financial Services and NLC Venture Group, and promised returns of 20% to 2,000% over the course of one to 18 months from supposed ventures in stocks, gold, diamonds, and oil commodities.
David Gentile, 57, was found guilty of running a Ponzi-like fraud through GPB Capital Holdings LLC. GPB is an investment advisory firm that misrepresented the performance of the funds and the source of monthly distributions to investors. More than $1.8 billion was raised from thousands of investors. Jeffrey Schneider, 55, the owner and CEO of marketing company Ascendant Capital LLC, was also convicted. Jeffrey Lash, a former managing partner at GPB, pleaded guilty last year.
Tom Girardi, 85, was convicted on charges relating to a 10-year Ponzi scheme run through his law firm, Girardi Keese. Girardi blamed his former chief accountant, Chris Kamon, 50, for at least $15 million Girardi siphoned from client settlement funds. Kamon allegedly misappropriated about $50 million from Girardi Keese accounts.
Jesse W. Harris, 36, of Kansas, was sentenced to 2½ years in prison in connection with a scheme run through Harris Custom Projects LLC.
Cynthia and Eddy Petion and their company Nova Tech Ltd. were charged by the SEC with running a cryptocurrency scheme that took in more than $650 million from over 200,000 investors around the world. Nova Tech is a crypto investment platform. The SEC also charged six NovaTech promoters—Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley. They are accused of recruiting investors.
Ross O. Schlomann, 45, of Wisconsin, was sentenced to 5 years in prison and ordered to pay $2.1 million in restitution in connection with a scheme involving home construction. Schlomann was a contractor with Refurbs Properties, LLC and defrauded more than a dozen victims whose homes he had promised to build. He used customer funds for other purposes, including shortages on previous projects.
Avinash Singh, 42, of Florida, was sentenced to 24 years in prison in connection with a $57 million investment fraud Ponzi scheme run through Highrise Advantage LLC. More than 1,100 victims were defrauded in the scheme. Singh claimed he was a successful foreign exchange trader, and investors were promised returns from investment in retail foreign currency contracts.
Paul Horton Smith Sr., 61, of California, was sentenced to 15 years and 8 months in prison and order to pay approximately $13.3 million in restitution in connection with a Ponzi scheme run through Northstar Communications LLC, Planning Services Inc., and eGate LLC that lasted nearly 20 years. The scheme defrauded at least 200 investors and brought in more than $24 million. Smith promised returns from purported investments in real estate and the stock market and that investments would generate a fixed rate of return.
James Stevens, 47, was sentenced to 4 years in prison in connection with a loan Ponzi scheme that was run through Primis Bank. Stevens is a former commercial lender who pled guilty to bank fraud by issuing fraudulent loans. Primis lost over $2.4 million.
Josh S. Verne, 47, of Florida, was charged by the SEC for falsifying documents as part of a Ponzi scheme to induce investors to invest. Verne separately pleaded not guilty to related criminal charges.
INTERNATIONAL PONZI SCHEME NEWS
Canada
Ronald James Aitkens was sentenced to 4 years in prison in connection with a $112 million Ponzi scheme run through Royal Bengal Logistics. Aitkens raised more than $35 million from about 1,500 investors between 2005 and 2007.
Brian Robert Gunsten, 52, was charged in connection with an alleged wine Ponzi scheme in which victims loaned money to purchase wine that would later be resold. There were more than $1.3 million in losses.
Ward Derek Jensen, 55, was sentenced to three years in prison in connection with a scheme run through Kassel Enterprises. Jensen had promised investors returns of 14% to 18% per year from investment in a private fund.
India
Sandeep Chowdhury, 41, was arrested on charges that he was running a cryptocurrency Ponzi scheme. Chowdhury is the CEO of Yes World.
Authorities attached assets in connection with its investigation of Pearlvine International, which is alleged to have run a Ponzi scheme from 2018 to 2023.
Jiyajur Raheman Syed was arrested on allegations that he was running a Ponzi scheme through LFS Broking Company. The scheme allegedly defrauded 55 people. The company claimed to invest 80% of the funds in blue-chip companies.
Philippines
Joel Apolinario was found guilty in connection with the Ponzi scheme run through Kapa Community Ministry International, Inc. Apolinario and Christopher D. Abad were sentenced to one year and one day.
Poland
Marcin and Katarzyna P. were sentenced to 15 years and 12 years six months, respectively in connection with a Ponzi scheme that defrauded 18,000 investors out of $225 million. The scheme was fun through Amber Gold.
Singapore
Yang Bin, 61, was sentenced to 6 years in prison in connection with a cryptocurrency Ponzi scheme run through A&A Blockchain Innovation that defrauded more than 700 investors. Bin promised investors .5% returns daily from purportedly owning 300,000 machines that could mine cryptocurrency through its Chain Mining Scheme. Lu Huangbin, Chen Wei, and Wang Xinghong are co-conspirators. Wang was jailed for 5 years. A total of about $6.7 million was invested.
South Korea
Byun Young-oh, the CEO of Wakon that operates the platform MainEthernet, was arrested on charges of running a scheme that generated $366 million of funds from over 500 investors. Investors were promised returns of between 45% and 50%. Byun denied that he was involved in a Ponzi scheme. Yeom Mo-si was also arrested in connection with the alleged scheme. Wakon’s parent company, SAK-3, is also under investigation.
Taiwan
Authorities sentenced 31 individuals in connection with a Ponzi scheme run though a peer to peer lending platform known as im.B, which is short for “I am Bank.” Tseng Yao-feng was sentenced to 16.5 years in prison, and his girlfriend Chang Shu-fen was sentenced to 12 years and two months. The other 29 defendants in the case received sentences ranging from 1–8 years.
Turkey
Andreas Szakacs aka Emre Avci was arrested in connection with a cryptocurrency and foreign exchange scheme run through OmegaPro aka Go Global. OmegaPro promised returns of up to 300% through a top-secret trading algorithm. The scheme allegedly defrauded millions of investors and brought in approximately $4 billion before it collapsed in 2022. Szakacs and co-founders Dilawar Singh and Mike Sims went into hiding after the collapse. Juan Carlos Reynoso was arrested in Mexico in 2023.
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