By Kathy Bazoian Phelps
Below is a summary of Ponzi scheme activity reported for December 2024. There were at least 12 new Ponzi schemes revealed this month, 3 guilty pleas, and 1 conviction. Ponzi schemers received more than 102 years of prison sentences this month and the average age of the fraudsters was about 47 years old. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
Mathias Bama, Valentine Bama, and Hilaire Leunkam, of Maryland, and their investment firm were fined $17.2 million and banned from offering investment or security services in connection with a Ponzi run through Prosperity Partners Inc. and Prosperity Medical and Health LLC. They promised a return of 6% per month, or an annual return of 72%. Approximately $28.9 million was brought into the scheme and investors received just under $12.4 million in payments on their investments.
Brent Barber, 45, of California, was sentenced to 15 years and one month in prison for his role in a $13.8 million Ponzi scheme run through BNZ Capital One. The scheme promised returns of up to 10% through real estate. Another owner of BNZ Capital, Louis Zimmerle, 65, pleaded guilty.
David Brend, 50, of Florida, was sentenced to 10 years in prison for his role in promoting the $58 million IcomTech Ponzi scheme. Brend’s co-defendant, Gustavo Rodriguez, 48, of California, was sentenced to 8 years in prison in connection with the cryptocurrency scheme. IcomTech was launched in 2018 by David Carmona.
Paul Burks had his 14 year and 10-month sentence commuted by President Biden. Burks was the owner of Rex Venture Group, LLC through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards.
Brian Callahan had his 12-year sentence commuted by President Biden. Callahan had run a $96 million Ponzi through Distinctive Ventures, involving the Panoramic View Resort in Montauk. Callahan had pleaded guilty to the scheme that raised more than $118 million from at least 40 investors.
Angela Dawn, 42, pleaded guilty to charges relating to a Ponzi scheme that defrauded more than two dozen people out of more than $1.5 million. Dawn promised she could double or triple investments through the stock market and her day-trading business.
Frederick Tayton Dencer aka Tayt Dencer, his son Luke Abelard Dencer, and their companies, Standard Holdings, Inc. and Standard Huaxia Ltd., of California, were charged with running a Ponzi scheme that raised over $17 million from at least 40 investors. They allegedly sold investors stock that did not exist and made Ponzi-like payments to investors. Dennis Edward Butler, 47, of New Jersey, was also charged for acting as an unregistered broker in connection with the scheme.
Marc Dreier had his 20-year sentence commuted by President Biden. Dreier had pleaded guilty to allegations that he, through his law firm, Dreier LLP, sold fraudulent promissory notes that caused approximately $400 million in losses.
Gordon Driver, 67, had his 14-year sentence commuted by President Biden. Driver had promised 1% to 5% returns per week from a supposed commodity futures trading program that involved E-mini S&P 500 futures contracts. Driver solicited investments through Axcess Automation LLC.
John K. Eckerd Jr., 60, of Ohio, pleaded guilty to his role in a Ponzi scheme involving off-the-road tires that defrauded investors out of $50 million. Eckerd worked with Jason E. Adkins, 47, who was previously convicted and sentenced in connection with the scheme. They promised returns from the buying and selling of large, specialized tires used in mining and earth-moving equipment.
Sylvein William Maximilian D’Habsburg XVII aka Sylvein Scalleone, 48, a Californian who pretended to be a European nobility, pleaded guilty to allegations that he ran a Ponzi scheme through Wild Rabbit Technologies LLC and BAI Intelligence LLC. D’Habsburg brought in about $6 million in investors, representing that they were investing in artificial intelligence technology that could predict the future and detect a COVID-19 infection using only a video recording. The scheme targeted elderly Filipino churchgoers.
James Nathan Fry, 70, had his 17.5-year sentence commuted by President Biden. Fry was a fundraiser for Thomas Petters and Petters Company Inc. Fry used two hedge funds known as the Arrowhead Funds, to raise funds for the scheme. He received more than $30 million in fees.
Johanna Michely Garcia, 41, of Florida, was sentenced to 20 years in prison in connection with the Ponzi scheme run through MJ Capital Funding, LLC. The scheme involved approximately $190,700,000. The scheme involved merchant cash advances, a type of short-terms financing used by small businesses. After MJ Capital was shut down, Garcia and Ruiz Hernandez began operating a new Ponzi scheme through New Beginning Global Funding LLC, New Beginning Capital Funding LLC, Lion Heart Capital Group L.L.C., GMR Remodeling LLC, and Group Management LLC.
Graeme Gary Hearn, Michael Holloway and Eric Ture Muhammad, and their company Trage Technologies Limited, of Georgia, were sued in connection with an alleged Ponzi-like cryptocurrency scheme. They promised profits of $120 per day and annual returns of $43,800 on a $10,000 investment. Trage Technologies is registered in the Marshall Islands and transferred more than $79 million of the investment funds to external accounts.
Benny Lee Judah, 64, had his 25-year sentence commuted by President Biden. Judah ran a $50 million Ponzi scheme. Judah ran the scheme through Excel Lease Fund, selling Excel debentures.
Andrew Mackey had his 27-year sentence commuted by President Biden. Mackey was convicted in connection with a $12 million Ponzi scheme that he ran with his common law wife, Inger L. Jensen. Jensen’s 14-year sentence does not appear to have been commuted.
Gary Lynn McDuff, 69, had his 25-year sentence commuted by President Biden. McDuff ran the scheme with Gary Lancaster through Lancorp Investment Fund, which they represented would invest in A+ or A1 rated bonds.
Timothy M. McGinn, 76, had his 15-year sentence received in 2013 commuted by President Biden. McGinn had been convicted along with David L. Smith, 79, of running a Ponzi scheme through McGinn, Smith & Co. The scheme caused $130 million in losses.
Gregory McKnight, 64, had his 15½-year sentence commuted by President Biden. McKnight has been convicted of orchestrating a $72 million Ponzi scheme and was sentenced in 2013. The Ponzi scheme ran from 2005 to 2007 and involved more than 1,800 victims who lost almost $50 million.
David McQueen, 44, was sentenced to 30 years in prison in connection with a $46.5 million Ponzi scheme. McQueen’s business partner, Trent Francke, had pleaded guilty and was sentenced to 7 years in prison.
Nurnepes Nurjanov, 34, of Texas, was sentenced to 3 years and 5 months and ordered to pay $1,505,500 in restitution in connection with a Ponzi scheme that defrauded investors out of more than $1.5 million. Nurjanov promised returns from stock trades.
Ruiz Ochoa was ordered to pay $3.5 million in restitution in the CFTC action against him in connection with the IcomTech cryptocurrency Ponzi scheme. Ochoa is serving a 5-year prison sentence for his role in the scheme that defrauded 190 individuals. David Carmona, Juan Arellano Parra, Moses Valdez, and David Brend have also been found liable in connection with the scheme.
Francier Obando Pinillo was sued by the CFTC on allegations that Pinillo, a former pastor for a Spanish-speaking church, ran a Bitcoin Ponzi scheme. The scheme raised more than $5.9 million from over 1,500 investors, promising returns of 34.9% per month. Pinillo claimed to be the CEO of Solanofi, Solano Partners Ltd., and Solano Capital Investments, which he said had developed a “Solano ecosystem” in which he traded Bitcoin. The CFTC alleged there was no automated computer trading program.
Richard Dow Rockwell and Dow Rockwell LLC had consent judgments entered against them, finding that they failed to disclose compensation they received in connection the scheme run through Professional Financial Investors, Inc. PFI ran a $35 million Ponzi scheme.
Nevin Shapiro, 55, had his 20-year sentence commuted by President Biden. Shapiro ran a $930 million Ponzi scheme through Capitol Investments USA. He claimed he would purchase wholesale groceries and sell them upmarket.
Duane Hamblin Slade, 53, had his 15-year sentence commuted by President Biden. Slade ran a $166 million Ponzi scheme along with Guy Andrew Williams and Brent F. Williams.
Frank Vennes Jr., 67, had his 15-year sentence commuted by President Biden. Vennes raised funds for the Petters Company, Inc. through his company Metro Gem and Arrowhead Capital Partners II, L.P. and Arrowhead Capital Finance, Ltd.
Ronnie Gene Wilson had his 20-year sentence commuted by President Biden. Wilson defrauded more than 700 investors out of at least $57.4 million through his company, Atlantic Bullion & Coin.
Trent Witteveen was sentenced to 3 years and 5 months in prison and ordered to pay more than $800,000 in restitution in connection with a Ponzi scheme run through Titan Timber that defrauded investors out of more than $2 million.
INTERNATIONAL PONZI SCHEME NEWS
Argentina
Seven people were arrested who were linked to the RainbowEx Ponzi scheme. It is estimated that 12,000 to 20,000 people lost money in the scheme. The scheme involved cryptocurrency and promised returns between 1% and 2% per day, or 3,500% per year. Maximiliano Braga, Alexis Pan, and Luis Pardo were the principals of the scheme.
Australia
David Sipina was sentenced to three years in prison in connection with the Courtenay House Ponzi scheme. Spinina recruited 215 investors and made $3.9 million in commissions in the scheme that raised $180 million from 585 investors. Courtenay House promised returns from trading in foreign exchange and futures commodities. Tony Iervasi was previously sentenced to 11 years, and Athan Papoulias was sentenced to two years in connection with the scheme.
England
London Capital & Finance was found to have been operated as a Ponzi scheme. A court found that Michael Thomson, Spencer Golding, John Russell-Murphy, Paul Careless, and Robert Sedgwick knowingly participated in the fraud. The scheme promised high interest rates on mini-bonds and caused about 11,600 investors losses of more than £237 million. Investors were promised 8% returns.
Richard Lester, 56, was convicted in connection with a £400,000 Ponzi-style scheme called Cruisemiles that sold miles through agents that were exchanged for cruises at discounted prices, but no cruises were booked.
India
Basudeb Bagchi, the founder of the Prayag Group, was arrested along with his son Avik.
Amber Dalal, the principal of Ritz Consultancy Services, was arrested in connection with an alleged Ponzi scheme that defrauded approximately 1,300 investors out of more than Rs 600 crore.
Hemen Rava, Sankar Saha, and M/s Upepithets Holdings Pvt. Ltd., were charged in connection with the Assam Ponzi scheme, promising guaranteed monthly returns of 6%. Jiten Deka, Indrani Das, Azara Branch, Sanjib Deka, Himangshu Talukdar, and Brahmaputra Sanchay and Biniyog Cooperative Society Ltd were also charged in connection with the Grihalaskshmi scheme that promised 15% returns.
Bhupendrasinh Zala was arrested on allegations that he was running a Ponzi scheme through BZ Financial Services. He allegedly collected Rs 450 crore from 11,000 investors and promised returns of 30% to 35%.
Four people were arrested on allegations that they were operating a Ponzi scheme through Crypto Miner-HNT (Helium Crypto Token) through a mobile app called SHAREHASH.
Several individuals have been arrested and are under investigation in connection with the scheme known as Niaz Alam aka Kabir.
Indonesia
Hector Aldwin Liao Pantollana was turned over to Philippine authorities following charges that he defrauded thousands of people out of $68 million in a casino-related scheme. Pantollana promised high returns for investing in the casino-junket industry, which recruits high rollers to gamble.
Singapore
Kenneth Kam Boon Hee, 57, was sentenced to 10 years in jail for running a S$5 million Ponzi scheme. Kam was the director of Kenn Capital, Kenn Organisation International, and Kenneth Kam Pte Ltd, and held himself out as a successful foreign exchange trader. He promised monthly interest of 3%.
Thailand
Three individuals were sentenced to 49,125 years each in connection with the Forex-3D Ponzi scheme. Chatchai “Sue” Khotchathin, Theeraphassakorn “Mark” Kimwangtako, and Suranart Nakmusik were found guilty for their roles in the Ponzi scheme run by Apirak Kothi. Their prison sentences are limited to 20 years.
Turkey
Hakan Ates, the CEO of Denizbank, and Mehmet Aydogdu, were indicted in connection with an alleged $44 million Ponzi scheme that defrauded dozens of investors. Secil Erzan was imprisoned last year. The scheme promised 250% interest in what was described as a secretive fund owned by the bank.
Vietnam
Nguyen Quang Hoang, 36, CEO of GFDI, was arrested in connection with an alleged Ponzi scheme that defrauded 7,000 investors out of VND3.7 trillion ($146 million). Tran Thi My Hanh was also arrested.
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