Kathy Bazoian Phelps
Senior Counsel in Ponzi Scheme Litigation
and Bankruptcy Matters

Kathy is a senior business trial attorney with more than 30 years experience prosecuting and defending claims for high net worth clients involved in Ponzi scheme matters and in bankruptcy proceedings. Kathy’s practice includes recovering assets for clients in complex fraud cases under standard fee and alternative fee arrangements. Kathy also serves as a mediator in bankruptcy matters, in complex business disputes, and in matters requiring detailed knowledge about fraud or Ponzi schemes.

Kathy’s Clients in Ponzi Scheme Cases and Bankruptcy Matters
Equity Receivers
Bankruptcy Trustees
High Net Worth Investors
Debtors in Bankruptcy
Secured and Unsecured Creditors

Friday, December 31, 2021

December 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for December 2021. The reported stories reflect at least 2 new Ponzi schemes worldwide, 4 guilty pleas, more than 48 years of prison sentences, and an average age of approximately 46 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Glen Arcaro, 45, had a judgment entered against him in connection with the BitConnect Ponzi scheme. Arcaro was a lead promoter of the scheme and used his company, Future Money Ltd., to promote the lending program. 

Erez Baver, 42, pleaded guilty to charges relating to a Ponzi scheme run with rabbi Zvi Feiner, 51. The scheme defrauded investors in a series of limited liability companies under FNR Healthcare LLC. Baver admitted that they misled investors about the cost of nursing homes and assisted living facilities.

Denny T. Bhakta, 39, of California, and his two companies, Fusion Hotel Management LLC and Fusion Hospitality Corp., were accused by the SEC of running a $15 million Ponzi scheme. Bhakta claimed that investments would be used to purchase hotel room reservation blocks from major chains and resell them to corporate clients. 

Vicki Boser, 58, of Washington, was sentenced to 2 years in prison in connection with a scheme that she ran through InsuranceTek, Inc. Boser supposedly assisted small businesses that work in high-risk fields in securing insurance policies to cover their business operations.

Jennifer Wee Cifuentes, 40, and her husband, Alcibiades Cifuentes, 39, were each sentenced to 71 months in prison in connection with a Ponzi scheme that defrauded about 30 investors out of more than $400,000. They induced investors to invest in foreign currency and commodity markets through Cifuentes Fund Management.

John Marques, of California, and Lifeline Innovations & Insurance Solutions LLC, were sued by the SEC in connection with their solicitation of 50 investors into the EquiAlt Ponzi scheme.

Dane Roseman, 38, and Ivan Acevedo, 44, pleaded guilty to charges relating to the Woodbridge Group of Companies LLC and reached a settlement with the SEC for about $3.7 million. 

Gaylen Rust, 62, of Utah, pleaded guilty to running a $200 million Ponzi scheme that involved silver trading and more than 500 victims. Rust’s ex-wife, Denise Gunderson Rust, 62, is already serving 18 months in prison after pleading guilty. Rust ran the scheme through Rust Rare Coin, Inc., R Legacy Entertainment LLC, and R Legacy Racing.

Richard K. Sears, 73, of Colorado, was sentenced to nearly 3½ years in connection with a cattle Ponzi scheme. Sears was to use investors’ cash to purchase Angus cows he would then lease back to mate with Romagnola bulls and to pay investors 10% returns with a right to either reclaim cows or receive the return of their full investment. Sears raised around $7 million and misappropriated about $5 million of that through his company, Trophy Outfitters, Inc. The scheme defrauded more than 100 investors.

Jeremy Spence, 25, pleaded guilty to running a $5 million online Ponzi-like scheme called Coin Signals. Spence misrepresented the returns he was supposedly generating by trading cryptocurrencies, promising monthly returns as high as 148%. The scheme defrauded 170 investors.

Michael Tomaszewski, 49, was sentenced to 2 to 6 years and ordered to pay $570,000 in restitution in connection with a Ponzi scheme

INTERNATIONAL PONZI SCHEME NEWS 

Australia

Bill Vlahos was sentenced to 9 years in connection with a $17.5 million scheme that defrauded 1,800 investors. Vlahos promised investors a secret advantage in connection with a club called The Edge.

India

Brijesh Gadiyali and Kiran Panchasara were arrested and Dhaval Laheri and Hitexh Gupta remain at large in connection with a cryptocurrency scheme. Investors were directed to a portal called cybertron.live to invest in a digital currency called Tron. They were promised returns of 2% per day. 

Chandrakant Bhargav Gole and Suresh Chandra Padhi were sentenced to 8 years in jail in connection with a scheme run through Sriram Electro Finance Ltd.

Manish Singh, 47, was arrested in connection with a scheme that allegedly defrauded 39 investors,

Nigeria

Authorities alerted the public to a Ponzi scheme run through Poyoyo Investment (Pilvest) Nigeria Limited. The scheme promised investors annual returns up to 150%.

Authorities warned that FinAfrica Investment Ltd. is not accredited and is operating as a Ponzi scheme.

South Africa

TKL-online Revenue is under investigation after hundreds of investors lost thousands of rand. 


Tuesday, November 30, 2021

November 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for November 2021. The reported stories reflect at least 3 new Ponzi schemes worldwide, 1 guilty plea, more than 116 years of prison sentences, and an average age of approximately 45 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Erez Baver, 41, of Illinois, pleaded guilty to charges relating to a Ponzi scheme that defrauded at least 75 investors out of at least $22 million. The scheme targeted the Orthodox Jewish community and was run through FNR Healthcare, along with Zvi Feiner. Feiner created FNR to supposedly buy and sell assisted living communities and nursing homes.

Joseph W. Bayliss, 46, was sentenced to three years in prison and ordered to pay about $481 million in restitution for his role in the DC Solar Ponzi scheme. Bayliss played a key role in covering up the fact that no new generators were being built as he shuffled vehicle identification numbers between generators, and he destroyed at least 1,000 identification stickers.

Robert Blom, 59, of South Dakota, was sentenced to 91 months in prison and ordered to pay $24 million in restitution in connection with a cattle Ponzi scheme. The scheme involved 30,000 fake cows and $24 million in lost funds. Blom resold the same cattle to multiple investors and falsified invoices.

David Oscar Braeger, 54, of Wisconsin, was indicted on charges that he ran two separate schemes that fraudulent obtained over $5.5 million from his victims. Braeger mispresented the status and value of his customers’ investments to conceal that funds had been stolen. Customers were provided with fake quarterly statements which showed that their funds were invested in Rubicon, when in reality that company had been closed and liquidated.

Jeff Carpoff, 50, was sentenced to 30 years in prison and ordered to pay $790.6 million in restitution in connection with a Ponzi scheme run through DC Solar. The scheme defrauded victims out of about $1 billion in connection with a business that made solar generators to provide emergency power for cellphone companies or to provide lighting at sporting and other events. Carpoff’s wife, Paulette Carpoff, 47, faces up to 15 years in prison after pleading guilty. Co-conspirators Robert A. Karmann, 54, Ronald J. Roach, 54, Joseph W. Bayliss, 46, Ryan Guidry, 44, and Alan Hansen, 50, all pleaded guilty in separate indictments.

Natalie Cochran, 40, currently serving an 11-year prison sentence for running a Ponzi scheme, was indicted for first degree murder of her husband, Michael Cochran. 

William Neil “Doc” Gallagher, 80, of Texas, was sentenced to three life sentences in prison in connection with a Ponzi scheme that he ran through Gallaher Financial Group and W. Neil Gallagher, Ph.D. Agency. Gallagher advertised on Christian radio that he was selling securities. He defrauded at least 30 victims out of $32 million. He offered investors “guaranteed, risk-free returns” of 5% to 8% annually. He pleaded guilty in 2020 and was sentenced to 20 years in prison in Dallas County and was then indicted in Tarrant County.

Joshua Matthew Houchins, 38, of North Carolina, was sentenced to 10 years in prison in connection with a Ponzi scheme that defrauded investors out of $1.5 million. Houchins had pleaded guilty to a real estate scheme which he ran through shell companies. He destroyed is computer when facing a subpoena in 2018.

Adam Joiner, 43, of California, was sentenced to more than 8 years in prison and ordered to pay $14 million in restitution after pleading guilty to charges relating to a Ponzi scheme involving foreign investors and a supposed agreement with Netflix. Joiner persuaded investors to pay $14 million to fund a film written by his brother and told investors that Netflix had agreed to distribute the film.

Stephen P. LeProhon, 32, was sentenced to more than 12 years in prison in connection with a scheme that defrauded 20 customers of his Industrial Boulevard boat consignment business.

John Piccarreto, Jr., 38, of New York, was sentenced to 84 months in prison and ordered to pay almost $20 million in restitution for his role in a Ponzi scheme that defrauded hundreds of investors. Piccarreto conspired with Perry Santillo, Christopher Parris and others in the scheme run through Lucian Development.

James A. Seijas was barred by FINRA from the industry for his role in the alleged $30 million-plus cryptocurrency investment scheme. In a lawsuit filed in Florida, Seijas was accused along with Quan Tran and Michael Ackerman for running a Ponzi scheme called Q31. The scheme promised returns of 15%, but only about $10 million of the funds were actually invested.

Matthew Preston Taylor, 44, was sentenced to 17 years in prison in connection with charges that he operated a scheme through his business, Savage Yachts LLC, that caused losses more than $1.5 million. 

INTERNATIONAL PONZI SCHEME NEWS 

Australia

Tony Iervasi and Athan Papoulias were charged in connection with an alleged Ponzi scheme. They are accused of defrauding around 590 investors who paid over $196 million into the scheme. Iervasi was the sole director and shareholder of Courtenay House Pty Ltd. and Courtenay House Capital Trading Group Pty Ltd.

China

Authorities confiscated crypto assets worth $62.5 million in connection with an alleged Ponzi scheme run through Filecoin miner IPFSUnion. Chinese police have arrested 31 people in connection with the alleged scheme. IPFSUnion released a statement saying that those arrested in the case had procured equipment through illegal means.

India

Police arrested Raghavendra, Nagaraju and Shivamurthy in connection with a chain-link investing model rung through a firm named FOMOEX. The scheme promised 20% returns and offered a commission for bringing in new investors.

Karthika, 32, and Prabhu, 30, were sentenced to 10 years in prison for defrauding 99 investors in a chicken farm scheme run through Healthy Poultry Farms India Pvt Ltd. The scheme promised investors country chicks and other incentives. 

Nigeria

Francis Uju Adoms was declared wanted by authorities in connection with an alleged Ponzi  scheme that defrauded investors out of N52 million. Adoms ran the scheme through Addy Finance & Investment Limited, registered under the Fund Managers Association of Nigeria. 

Russia

Fugitives of Finiko are suspected of removing 750 bitcoin from a cryptocurrency wallet worth about $48 million. Zygmunt Zygmuntovich, Marat Sabirov, and Edward Sabirov, who are associates of the scheme’s founder Kirill Doronin, fled Russian as the crypto investment scheme collapsed earlier this year.

Singapore

Jaya Rethinasamy Ghandi, 54, was sentenced to 25 months in prison in connection with a $700,000 Ponzi scheme 

Thailand 

MBC Club was shut down and the principal arrested for a scheme that defrauded thousands of victims and caused 1 billion Baht in damages. Victims were promised large profits from foreign exchange market trading. MBC promised 40% average monthly returns and a year-end bonus of a Porsche luxury sports car.

Turkey

Faith Aydin was extradited to Turkey. Aydin and her brother, Mehmet Aydin, are founders of Ciftlik Bank (Farm Bank) and are accused of running a $110 million Ponzi scheme that defrauded more than 132,000 people. 

Sunday, October 31, 2021

October 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for October 2021. The reported stories reflect at least 8 new Ponzi schemes worldwide, 1 guilty plea, more than 78 years of prison sentences, and an average age of approximately 55 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Mejdi Mahmoud Abousaoui, 37, was sentenced to 25 years in prison and was ordered to pay $2.8 million in restitution for his role in a $4 million that defrauded 70 victims. Abousaoui fraudulently promised monthly returns of 5% from the supposed purchase of equities, bonds, and other products. Abousaoui had previously pleaded guilty to charges.

Dean Alford, of Georgia, pleaded guilty and was sentenced to 8 years in prison in connection with a scheme involving energy projects. Alford raised at least $23 million selling fake accounts receivable invoices.  

Brent Reed Barber, 42, of California, was arrested on charges that he raised $13.8 million in an alleged Ponzi scheme. Barber is the co-owner of BNZ Capital One LLC along with Louis Alfonso Zimmerle, 62, who was also charged in connection with the alleged scheme and has agreed to a plea deal. The SEC also filed a parallel civil action. The scheme involved the buying and selling of real estate projects that promised investors “guaranteed” returns of between 8% and 10%. The scheme defrauded about 105 investors.

Eric V. Bartoli was sentenced to 20 years in prison in connection with a $42 million scheme. Bartoli was a securities broker accused of defrauding hundreds of investors and then of fleeing to Peru. At the resentencing hearing, Bartoli denied any wrongdoing during his sentencing and stated, “I can’t flee if no one is looking for me.” The 20-year sentence was more than double the penalty suggested in Bartoli’s plea agreement.

Storm Bryant and Elijah Bryant III, of North Carolina, were sued by the CFTC, along with their companies, CapitalStorm, LLC, GenerationBlack LLC, and NCome LLC. The charges relate to an alleged $1.05 million scheme in which they solicited funds to engage in off-exchange foreign currency on a leveraged, margined, or financed basis. The scheme took money from about 94 investors

Tochukwu Edeh, 31, was charged with operating an unlicensed money transfer business to launder the proceeds of online investment fraud schemes based in Nigeria. Edeh ran used-car dealerships and currency transfer services in Texas, Florida, and Nigeria.  The scheme offered trading and Bitcoin investing services, but investor money was not used for those purposes.

Victor Farias, 48, of Texas, was sentenced to 11 years in prison and ordered to pay more than $7.4 million in connection with a Ponzi scheme that defrauded police officers. Investors were promised returns of 10% to 12% per year from a scheme that was supposed to generate profits from aircraft engines and other parts that would then be leased or resold to major airlines. About 90 investors were defrauded out of their retirement savings.

Larry A. Holley, 64, or Michigan, was sentenced to 100 months in prison in connection with a scheme that defrauded more than 140 investors. Holley, a pastor, ran the scheme with Patricia E. Gray, 60, through a entity called Treasure Enterprise LLC and promised investors large returns. They defrauded investors out of about $9.3 million. The funds were used to pay themselves, however, and to transfer money to Abundant Life Ministries. Gray was sentenced to 42 months in prison.

Albert Rossini, 73, was sentenced to 11 years in prison in connection with $7 million Ponzi scheme that he ran through Devon Street Investments. Rossini was convicted along with Babajan Khoshabe and his son, Anthony Khoshabe, who are awaiting sentencing. Investors were told their funds would be used to buy mortgages of Chicago-area apartment buildings at or near foreclosure. In reality, there were no buildings, and Rossini created fictitious documents and filed a fake lawsuit to defraud the victims.

Abner Alejandro Tinoco and his company, Kikit & Mess Investments, LLC, were charged by the CFTC on allegations that they fraudulently solicited over $3.9 million from 61 clients. The clients had given their money to be managed in customized client portfolios for foreign exchange and crypto trading. Most of the money was instead used to pay Tinoco’s personal expenses such as chartering a private jet, renting a luxury mansion and cars, and buying real estate.

Ann M. Vick, 59, of Colorado, settled the SEC’s charges that she was running a $3.2 million Ponzi scheme through her company, AMV Investments. The scheme allegedly defrauded approximately two dozen investors by promising them “exorbitant” returns from options trading.  Vick and AMV promised monthly interest payments of 5% to 10%. Vick consented to a judgment enjoining her from future violations or selling securities, but she did not admit or deny the allegations.

INTERNATIONAL PONZI SCHEME NEWS 

India

Virithgopalan Nair, 76, and his wife Valsala were arrested in connection with an alleged Ponzi scheme run through VGN Jewellers, a well-known jewelry store. About 137 investors were defrauded in the scheme.

Harshul Kaushik and Gurmeet Sahni were arrested on charges that they were running a Ponzi scheme under the name E-Rickshaw on Rent. Complaints involving 1,100 victims have been received. The ran the scheme through a company called SOS Vehicle Service Pvt Ltd.

Israel

A bankruptcy court in Manhattan granted recognition of the Israeli insolvency proceeding against Michael David Greenfield aka Michael Ben-Ari. Greenfield has been dubbed “the Israeli Madoff” and is under criminal investigation for an alleged 15-year Ponzi scheme that may exceed $150 million.

Nigeria

Bamise Samson and Elizabeth Ajetunmobi are on the run after having been accused of defrauding thousands of investors out of 22 billion Naira through their business, Imagine Global Solutions Ltd. Rumors are that they obtained Antiguan and Barbudan passports, but authorities in those countries have stated that they will not serve as a refuge for criminals. Imagine Global was a micro lending service for small and medium business and offered investors 10% interest.

Philippines

Authorities charged Organico Agribusiness Ventures Corp. and its president, Cerrone Roial Posas, and officers Marve Subere Posas, Renato Subong, Anthony Butaslac, and Karen Maasin in connection with an alleged Ponzi scheme.


Thursday, September 30, 2021

September 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for September 2021. The reported stories reflect at least 8 new Ponzi schemes worldwide, 6 guilty pleas, more than 67 years of prison sentences, and an average age of approximately 50 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Glen Arcaro, 44, of California, pleaded guilty to charges for his role in defrauding cryptocurrency investors in the worldwide Bitconnect Ponzi scheme. The SEC also filed charges against Arcaro and Bitconnect in connection with the $2 billion scheme. Arcaro was the lead promoter of the scheme through his website, Future Money, and he earned no less than $24 million in connection with the scheme. The SEC also sued Bitconnect founder, Satish Kumbhani, for obtaining 325,000 bitcoins through the “lending program” where investors were falsely told that their funds would be pooled and used to earn daily returns.

Jan Douglas Atlas, 76, of Florida pleaded guilty to charges relating to a $322 million Ponzi scheme that was run through 1 Global Capital LLC.  He was a securities lawyer who served as outside counsel for 1 Global and prepared letters that contained false descriptions about how the 1 Global investments actually worked. Atlas had pleaded guilty in 2019, and he was sentenced to 8 months in prison and ordered to pay $29.8 million in restitution. Another lawyer in the same firm, Andrew Dale Ledbetter, 79, was sentenced to 5 years in prison and ordered to pay nearly $149 million in restitution.

Bryan Bartz, 39, was sentenced to 5 years and 10 months in connection with a Ponzi scheme that stole more than $1 million from investors. Bartz worked as a broker at different insurance companies and created more than 100 fraudulent policies, collecting commissions and bonuses.

Efrain Betancourt Jr., of Florida, and his company, Sky Group USA, LLC were sued by the SEC on allegations that they defrauded more than 500 investors in the Venezuelan-American community in South Florida. Fraudulent promissory notes totaling $66 million were sold to investors who were told their funds would be used to make payday loans and cover the costs of such loans. Investors were promised returns as high as 120%. In reality, Betancourt spent at least $2.9 million for personal use, including an extravagant wedding and vacations. Another $ 3.6 million was transferred to friends and family, including his ex-wife Angelica Betancourt and to the firm EEB Capital Group LLC, a company controlled by Betancourt.

Gregory Demetrius Bryant, Jr. aka Gregory Surrey England, formerly of Hawaii, was charged by the CFTC with running a Ponzi scheme through an unlawful commodity pool operated by Surrey Libor Capital, LLC and Libor Capital. Bryant solicited $426,000 from at least 35 participants, promising guaranteed monthly futures and forex trading returns of 60% to 80%

Jason Bullard, 57, and Angela Romero-Bullard, 49, and their company Bullard Enterprises LLC, were sued by the SEC accusing them of running a multi-million Ponzi scheme. The SEC alleges that they raised $17.6 million from about 200 investors. The investors were told their funds would be used for investments supposedly providing returns of 10% to 12%, but instead the funds went to pay credit cards, life insurance premiums and to prop up their other businesses including Empire Racing Stables. The SEC alleges that the Bullards had received $434,000 in federal funds from the Paycheck Protection Program that had been established to help employers retain employees during the pandemic but, instead, the Bullards used the PPP money to continue to operate the Ponzi scheme. 

Gregory Ciccone, 43, was charged with running a Ponzi scheme through fake companies, such as Platinum Travel and Entertainment and Platinum Enterprises & Concierge Service. Ciccone promised 50% returns within 6 months by buying luxury hotel rooms which he would supposedly resell to elite clients. 

Victor Farias, 48, was sentenced to 11 years and 3 months in prison with a Ponzi scheme he operated through Integrity Aviation & Leasing. Investor losses were over $7.4 million. Farias misrepresented that investors’ funds would be used to purchase aircraft engines and that the aircraft engines would be leased to airlines for profit. About 90 investors were defrauded.

Maurice Fayne, 38, of Georgia, also known as Arkansas Mo, was sentenced to 17½ years in prison and ordered to pay $4.5 million in restitution for running a Ponzi scheme and other fraudulent activity. Fayne pleaded guilty in May to charges stemming from false statements made to a financial institution involving a loan application for $3.7 million from the Paycheck Protection Program. Fayne intended to use the PPP program as a cover for a long-running Ponzi scheme run through his supposed trucking business, Flame Trucking, that defrauded more than 20 people. Fayne, who was a reality TV star, used the PPP funds to cover expenses, pay a previous fraud restitution obligation, and for luxury items such as jewelry and a Rolls-Royce lease.

Zachary Joseph Horowitz aka Zach Avery, 34, has agreed to plead guilty to charges relating to a $650 million Ponzi scheme that defrauded more than 250 investors. Horowitz admitted that he has failed to repay $231 million in a scheme run through 1inMM Capital LLC. He misrepresented that investors would lend money for film deals and that they would be repaid with a return of 25% to 45% within a year. Horowitz acknowledged that the distribution and licensing contracts were forged and that investors were shown fake correspondence with Netflix and HBO executives. 

Katie Lynn Mancuso, 40, of Tennessee, was charged in connection with an alleged Ponzi scheme in which she solicited $2.8 million from at least 26 investors. The scheme was run through Gray Area Marketing, which was purportedly a sports marketing agency that represented famous athletes. 

Oppenheimer & Co was sued in a class action lawsuit by investors alleging that one of its advisers, John J. Woods, was operating a Ponzi scheme through Horizon Private Equity III LLC. The SEC sued Woods last month alleging that he defrauded more than 400 investors.

Stefan Qin, 24, was sentenced to 7½ years in prison for running a $90 million Ponzi scheme that defrauded more than 100 victims. The scheme was run through Virgil Sigma Fund LP and which was supposedly a hedge fund that had generated 500% returns by exploiting the price gaps between cryptocurrencies on 40 exchanges throughout the world.

Philip Elvin Riehl, 68, of Pennsylvania was sentenced to 10 years in prison in connection with a Ponzi scheme that took in $59 million from 400 investors. Riehl was not licensed to invest other people’s money, and he targeted Amish and Mennonite families.

Roberto Gustavo Cortes Ripalda, Fernando Haberer Bergson, and Ernesto Heraclito Weisson Pazmino were arrested on allegations that they were running a scheme that caused more than $155 million in losses.  The three are former managers of a Florida financial services firm, Biscayne Capital, and are accused of defrauding both investors and financial institutions. 

James “J” Siniscalchi, 48, was sentenced to a year of home confinement and ordered to pay $1.9 million restitution in connection with the sports and theater ticket resale Ponzi scheme operated by mastermind, Joseph Meli. Meli was sentenced to 3 months in prison in connection with the scheme.

Brenda Smith, 61, of Philadelphia pleaded guilty to charges relating to a $100 million Ponzi-like scheme. Smith is a former broker who ran the scheme through Broad Reach Capital, a fund she controlled in which she claimed had positive returns and was highly liquid. She raised money from approximately 40 investors and transferred the funds for “purposes inconsistent with the trading strategies” including $2 million on credit card bills.

Kent R. E. Whitney of California was sentenced to 14 years in prison and ordered to pay $22 million in restitution in connection with a Ponzi scheme he ran through Church of the Healthy Self. Whitney was the pastor of the church who pleaded guilty last year to running a Ponzi scheme. 

INTERNATIONAL PONZI SCHEME NEWS 

Australia

Devin Persens was arrested on accusations that he defrauded investors into a Ponzi scheme that promised 20% to 30% returns on their investments. 

Canada

Joshua James Tenhove pleaded guilty to charges relating to a multi-million Ponzi scheme involving the purchase and rental of industrial light towers.

China

Six suspects were arrested after raising $5.7 million for over 700 clients in a scheme involving women’s beauty services. The scheme was run through a beauty service agency called Cansi.

India

Four directors of the wealth management firm, IQRA Wealth Management, were held on charges that they were running a Ponzi scheme. It is alleged that they defrauded 91 investors by promising high returns.

Philippines

SCET Colleens Corporation and Shara Jane Casao Chavez, Kay Anne Cuizon Leyson, Edith Francisse Villegas Tablante, Rita Saguindel and Artemio Tarona Ponce Jr. were accused of running a Ponzi scheme. The scheme promised investors 5% to 8% returns per month from a beauty and personal care business.

Russia

Lilia Nurieva and Dina Gabdullina, 31, were arrested in connection with the Finiko crypto currency scheme. The women are accused of managing around $10 of victim funds. Finiko founder Kirill Doroniin has already been arrested. 

Zimbabwe

The Crypto Share Investment Scheme formed by Martin Mhlanga has been accused of running a Ponzi scheme. Investor losses are estimated at $6 million. Mhlanga is missing and his South African phone number is unavailable.


Tuesday, August 31, 2021

August 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for August 2021. The reported stories reflect at least 4 new Ponzi schemes worldwide, 3 guilty pleas, more than 32 years of prison sentences, and an average age of approximately 57 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Interactive Brokers was sued in a class-action lawsuit alleging that it aided and abetted a $23 million Ponzi scheme run through the account of Haena Park. Park lost over $14 million of investor contributions that were deposited into the account. She was sentenced to 3 years in prison in 2018.

Kim Butler, of Texas, was barred by the SEC for steering investors into the Ponzi scheme run by Woodbridge Group of Companies.

Brian Davison, the CEO of EquiAlt LLC, settled claims of the SEC against him that he took part in a $170 million Ponzi scheme. The EquiAlt real estate scheme raised $170 million from about 1,100 investors. Davison ran the scheme with Barry Rybicki.

David DeBerardinis, 59, pleaded guilty to certain charges in connection with a fraud that prosecutors alleged exceeded $100 million and affected more than 20 investors. He had previously pleaded not guilty to charges that he defrauded investors out of $96 million. Investors, mostly from Louisiana, believed they were buying into legitimate energy trades and were promised 17% returns. 

Johanna M. Garcia, of Florida, and her two companies, MJ Capital Funding LLC and MJ Taxes and More Inc., were charged by the SEC with running an alleged Ponzi scheme. More than 2,150 investors invested at least $70 million in the scheme that involved fraudulent securities offerings. Investors were promised annual returns of 120% to 180% returns from supposed small business loans called “merchant cash advances.” The SEC alleges that possible sales agents included Bryant Guayara and Shanaz Ali of Da VibezCreations LLC and DaVibezStudio; Erick Ruiz of Four Corners Investors Group LLC; Steven Fernandez and Monica O'Mealia of Empire Investors, LLC; Gloria M. Galvez and Mauricio A. Guayara of GMG Special Services, LLC; Shaaz Ali of Obsidian South, LLC; Raed Kahn of Ascension Capital Group, LLC; Marco Rosas and Mauricio Rosas of M5 Store LLC, Zio Marco Transportation LLC and Zio Marco Services LLC; Leonela Duarte and Harry Medina of HAMN, LLC, LeDuarte Corp. and LeDuarte USA, LLC; and Osmary Soto and Fabricio Guzman of DMFabrimar General Services, LLC. A group of investors have sued Wells Fargo Bank for allegedly aiding and abetting the scheme.

Michael David Greenfield aka Michael Ben-Ari and his Israeli investment company, EGFE Israel Ltd., are suspected of operating a Ponzi scheme in Israel. A U.S. Bankruptcy Court issued an emergency order approving a lawyer representing Israel to recover $150 million of lost funds in the U.S. Greenfield was arrested in April by Israeli authorities but he fled the country using a fake passport. His whereabouts are unknown. 

Joshua Jeppesen, Michael Noble, and Laura Mascola agreed to a settlement with the SEC regarding their involvement in the Bitconnect Ponzi scheme. The settlement involves more than $12 million and is in relationship to the $2 billion scheme that collapsed in 2018.

Joy Kovar, 86, and her son, Brent Kovar, 54, were sued by the SEC, and the appointment of receiver was sought in connection with an alleged scheme run through Profit Connect Wealth Services Inc. The scheme allegedly raised at least $12 million from more than 277 investors. Investors were told that their funds would be invested in securities and cryptocurrencies such as bitcoin and that investments would be made based on recommendations from an “artificial intelligence supercomputer.”

Andrew Dale Ledbetter, 79, was sentenced to 5 years in prison for his role in raising about $149 million as part of a $322 million Ponzi scheme run through 1 Global Capital LLC. Ledbetter had reached a plea agreement earlier in the year and agreed to relinquish his law license. The scheme promised investors returns from business loans known as merchant cash advances and defrauded 3,600 investors in 42 states. Jan Douglas Atlas and Alan G. Heide were previously sentenced in connection with the scheme, that was masterminded by CEO Carl Ruderman.

Wayne McKelvy, 59, of Colorado, was sentenced to 18 years in prison and ordered to pay $37 million in restitution for his role in a $54 million “green energy” Ponzi scheme run through Mantria Corp. McKelvy ran the scheme with the help of Troy Wragg, 39, and Amanda Knorr. The scheme promised investors up to 484% returns. 

Mirror Trading International is under investigation by U.S. authorities on allegations that it was running a bitcoin scheme. The company is based in South Africa but many of the 260,000 investors are outside of that country. 

Christopher A. Parris, 41, of Georgia, pleaded guilty to charges relating to a Ponzi scheme as well are wire fraud involving the purported N85 masks during the pandemic. Parris, along with co-defendant Perry Santillo, defrauded about 1,000 investors out of at least $115.5 million through their company, Lucian Development. Lucian had acquired City Capital Corporation, which turned out to be a Ponzi scheme being run by Ephren Taylor. Lucian offered returns from investors in products issued by First Nationale Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation and NexMedical Solutions. Santillo was previously convicted and is awaiting sentencing.

Timothy Patrick Peabody and Monarch Capital Investment Fund LLC were the subject of a final cease and desist order sought by the Missouri Secretary of State, Securities Division. They used a company called Retire Happy, LLC to raise funds for the investments in the unregistered securities. They raised more than $7 million. Investors were told their investments were to fund real estate investment ventures in Florida.

Martin A. Ruiz of New York was arrested on charges that he defrauded investors out of more than $8 million of retirement savings. Ruiz is an investment advisor who solicited investors in his hometown in New Mexico to buy limited partnership shares in a supposed real estate investment vehicle called RAM Fund. Ruiz’s Carter Bain Wealth Management LLC controls more than $61 million in client investments. 

William Stenger of Vermont reached a plea deal in connection with the Ponzi scheme run through Jay Peak Resort. Stenger was the former president of the ski resort. Ariel Quiros, the former owner of Jay Peak, changed his plea to guilty last year. William Kelly, an advisor to Quiros, was indicted along with Stenger and Quiros over their failed plan to build a biotechnology plant using money raised through an EB-5 visa program. About $110 million was raised from 220 immigrant investors in connection with the biotech project. 

John J. Woods of Georgia was sued by the SEC and his assets were frozen on allegations that he defrauded more than 400 investors out of $110 million. Woods allegedly ran the scheme through Horizon Private Equity III, LLC, and investment advisors at Livingston Group Asset Management Company dba Southport Capital. Woods denies that he was running a Ponzi scheme.

INTERNATIONAL PONZI SCHEME NEWS 

Brazil

Authorities seized 591 bitcoin worth about $28.5 million from an alleged Ponzi scheme in what is the largest cryptocurrency seizure ever in Brazil. GAS Consultoria Bitcoin promised returns of 10% to customers. The owner of GAS, Glaidson Acacio, was arrested along with 4 others.

England

Jolan Saunders was sentenced to almost 9 years in connection with a Ponzi scheme run through Saunders Electrical Wholesale Ltd. for failing to pay his confiscation order. His co-conspirators, Michael Strubel and Spencer Steinberg, were previously sentenced to 7 years and 6 years 9 months, respectively. The three defendants were previously convicted of lying about supply contracts to supposedly supply the Olympic village for the London 2012 Olympics. The scheme took almost £80m from investors.

India

Mohammad Aslam was arrested on allegations that he defrauded 50 investors in a Rs 2.5 crore Ponzi scheme.

Nandlal Kesar Singh, 55, chairman of the Phenomenal group of companies, was arrested on allegations that he defrauded investors out of Rs 684 crore. Singh allegedly convinced investors to invest in his companies, Phenomenal Housing Finance Ltd, Phenomenal Plantation Ltd, and Phenomenal Healthcare Services.

Nigeria

Joshua Adeyinka Kayode, 22, was arraigned on charges that he defrauded 170 investors out of N10.9 billion though his fraudulent investment program run through Quintessential Investment Company Limited.

Barimke Group has been charged with allegedly running a Ponzi scheme. The scheme promised returns of 27% and was run by Barisuka Turakpe aka Barisuka Craig and Uzoamaka Ijeoma Chinoyerum.

Russia

Kirill Doronin, one of the founders of Finiko, was arrested in July in connection with an alleged large cryptocurrency Ponzi scheme. Doronin had obtained Turkish citizenship under a different name, Onur Namik. Finiko’s other co-founders, Marat and Edward Sabirov and Sygmunt Zygmuntovish were placed on a wanted list by Russian police. Investors were promised returns and were to exchange bitcoin for the native token of Finiko in return. Investors’ losses might be up to $95 million.  

Turkey

Authorities busted an alleged Ponzi scheme involved Dogecoin. The scheme involved a Dogecoin mining system in which investors were promised guaranteed returns of 100% within 40 days. About 1,500 investors were defrauded.


Saturday, July 31, 2021

July 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for July 2021. The reported stories reflect at least 5 new Ponzi schemes worldwide, 5 guilty pleas, more than 72 years of prison sentences, and an average age of approximately 52 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

George S. Blankenbaker Jr., 56, was sentenced to 5 years in prison in connection with a fraudulent scheme run through his companies, three business entities, Stargrower Commercial Bridge Loan Fund 1 LLC, Stargrower Asset Management LLC and EDU Holding Trust. More than 100 individuals invested more than $10 million in the scheme that supposedly needed funds to finance the use of shipping containers of food. 

Thomas F. Casey and Dennis R. Di Ricco, the founder and CFO of Golden Genesis, Inc., respectively, were ordered to pay $1.6 million in connection with a scheme that defrauded seven Missouri investors. They utilized an unregistered Las Vegas broker-dealer, Retire Happy, LLC, to sell more than $9 million in investments. 

Manuel Chavez, 30, of Florida, and Mark Oman, 36, of Washington, were convicted on charges relating to a sweepstakes scheme that took $4.5 million from victims. The two defendants falsely told victims they had won a sweepstakes prize but requiring investors to pay a fee to collect their reward for supposed taxes and fees.

David deBarardinis, 59, of Louisiana, pleaded guilty to running a Ponzi scheme that defrauded more than 20 investors. Prosecutors allege that the fraud exceeded $100 million. deBarardinis convinced investors to loan him money to act as a middleman in energy trades.

Allen Roy Duquet, 70, was sentenced to 25 years in prison and ordered to pay over $5 million in restitution in connection with a Ponzi scheme that defrauded 26 investors. Duquet solicited money from investors for real estate investments but instead mismanaged and misused the funds. Joseph Bernard Charde has also been accused of acting as a broker to the transactions made by Duquet as a part of its investment program called "The Commission Resource Program."

Richard E. Geaerhart, 71, of Indiana, was sentenced to 5 years in prison and ordered to pay $5.3 million in restitution in a securities Ponzi-like scheme. Gearhart was a licensed insurance agent from 2008-2013 operating out of Gearhart & Associates. He was also CEO of Asset Preservation Specialists Inc. He sold unregistered securities to his insurance clients and promised them that there was no risk to their principal and returns of 6% to 8%.

Craig Harbaugh of Nebraska was found dead on the day he was to be sentenced following his conviction for running a Ponzi scheme. Harbough was a former deputy sheriff and was convicted of defrauding a bank and several individuals out of nearly $11 million. He provided false purchase orders and service contracts for his business which sold tactical gear for law enforcement.

Bernard Ross Hansen aka Ross B. Hansen, 60, of Washington, was convicted on charges that he defrauded investors in a scheme run through Northwest Territorial Mint. Vault manager, Diane Renee Erdmann, 48, was also convicted.  They ran both a custom business that manufactured medallions and other awards, as well as a bullion business that involved the selling, buying, exchanging, storing, and leasing of gold, silver, and other precious metals.  

George Heckler, 65, was sentenced to 5 years and 3 months in prison and was ordered to pay restitution in the amount of $19.25 million in connection with a scheme that defrauded investors out of about $20 million. Heckler ran the scheme through multiple investment funds, including Conestoga Partner Holdings, Cassatt Short Term Trading Fund LP, and CV Special Opportunity Fund LP.

Joshua Heppensen, Laura Mascola, Ryan Maasen, and Michael Noble settled with the SEC in connection with their role as promoters of the BitConnect scheme. The Bitcoin scheme raised over $2 billion before shutting down.

Naim Ismail, 60, pleaded guilty to running a $15 million Ponzi scheme that involved supposed real estate investments. Ismail defrauded both individual and corporate victims.

Roger Nils-Jonas Karlsson, 47, a Swedish citizen, was sentenced to 15 years in prison and ordered to pay over $16 million in restitution in connection with a cryptocurrency scheme. Karlsson had pleaded guilty to running the scheme through a business called “Eastern Metal Securities.”

Joy Kovar, 86, and her son Brent Kovar, 54, were sued by the SEC on allegations that they were running a $12 million Ponzi scheme that defrauded 277 investors. The alleged scheme was run through their Las Vegas based company, Profit Connect Wealth Services. The Kovars represented that supercomputer and artificial intelligence could generate 20%-30% fixed returns per year with monthly compounding interest.

Dane Roseman, 38, and Ivan Acevado, 44, of California, pleaded guilty in connection with the Woodbridge Group of Companies Ponzi scheme. They worked as sales agents for Woodbridge and falsely claimed that Woodbridge was profitable and promised high rates of return. The scheme defrauded more than 9,000 investors out of more than $1.29 billion. 

Alexander S. Rowland, 30, of New Jersey, was sentenced to 9 years in prison and ordered to pay more than $3.1 million in restitution. Rowland defrauded more than 120 clients who thought they were investing in Rowland’s company, Roaring Investments, Inc., for purposes of investing in stocks and cryptocurrency. He promised a minimum return of 25% with potential returns of 50% or higher.

Lambert Vander Tuig and Ben Schachtshneider were sued by the SEC on allegations that they ran a $50 million Ponzi scheme through Biosynetics and Biosynetics Management. Investors were told that the funds would be used for research and development. Additionally, the sum of $763,500 was raised from 28 investors through the nonexistent pharmaceutical company that supposedly had secured distribution agreements with major retailers.

Howard L. Young, 75, was sentenced to 8 years on prison. Young solicited cancer patients to invest in his company, Integrative Medical Services, telling them he had received a $2 million grant from Vanderbilt University to study cancer. Participants had to pay $10,000 up front, but he did not hold the money in escrow as he promised. Patients also did not routinely receive the nutritional supplements, exercising, coaching or gym memberships promised by Young.

INTERNATIONAL PONZI SCHEME NEWS 

Australia

Michael Gu, whereabouts unknown, is the founder of the property group iProsperity and is accused of running a $245 million Ponzi scheme. The scheme collapsed last year when authorities accused of him of defrauding clients by claiming he was buying a portfolio of commercial property in Australia. Harry Huang, the CFO, was also accused of misappropriating investor funds. Gu allegedly passed $8 million though the Crown Melbourne Casino.

Mirror Trading International, a collapsed cryptocurrency trading firm, was placed into final liquidation. An additional 8,000 bitcoin, valued at about $268 million, were traced and added to the 1,281 bitcoin previously recovered.

Chris Marco, 63, is under investigation for running a Ponzi scheme that allegedly defrauded as many as 340 investors for 16 years. The fraud is alleged to have defrauded investors out of $250 million.

Joe Papalia, an accountant, is being investigated in connection with an alleged Ponzi scheme.

United World Enterprise is accused of running a Ponzi scheme through the cattle farm at Currabubula Station. UWE is Chinese-owned and lured more than 900 retirees into investing up to $46 million for fake agritourism and aged-care village schemes. 

Brazil

Claudio Oliveira was arrested in connection with an alleged $300 million cryptocurrency scheme run through the Bitcoin Banco Group. 

England

Stephen Allen pleaded guilty in connection with his role in the Renwick Haddow Ponzi scheme. Allen forged information regarding Haddow’s assets.

Ghana

Authorities sought to shut down Q-NET Company Limited, Q-NET Investments Limited, and Q-NET Limited on allegations that they were operating a Ponzi scheme. The directors of the companies are identified as Mbun Mbabugri Kazani and Braimah Suraju.

India

Syed Fakruddin, 47, Miran Mohideen, 48, and Mohammad Manas, 32, were arrested in connection with a scheme allegedly run through a mobile app called “Share me.”

Chetan Dand, 42, was arrested on allegations that he was running a Ponzi scheme that defrauded over 100 investors out of Rs 16 crore. Dand’s accomplice, Kelvin Kenia, 23, left for Africa with the money but his family claim he died during the pandemic. 

Mir Sahimat alias Kalu and Mir Jamiruddin were arrested in connection with an alleged Ponzi scheme run through Green Ray International.

Pratap Kumar Biswal was arrested on charges that he was running a Ponzi scheme through Mass Infra Reality

Dillip Kumar Jain, one of the directors of Ocean Videsh Limited, was arrested in connection with a scheme that defrauded investors by promising returns from long-terms loans at low rates of interest. The company was shut down in 2013 and two other directors had been arrested.  Jain had been on the run.

Turkey

Mehmet Aydin, 29, is being extradited to Turkey to face charges that he was running a $130 million Ponzi scheme. Aydin is the developer of the Farm Bank online game also known as Cliftlik Bank. Aydin turned himself in in Brazil out of fear for his life. He faces 75,000 years on prison for running the scheme that defrauded over 130,000 people. Fatih Aydin, the brother of Mehmet, was detained in Uruguay and is expected to be extradited to Turkey.

A real estate company called Gerçek Evim (My Real Home) operating under SAS Holding has been found to be part of a Ponzi scheme that grossed $69.2 million. The company promised 10% returns to its 13,000 customers.


Wednesday, June 30, 2021

June 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for June 2021. The reported stories reflect at least 9 new Ponzi schemes worldwide, 2 guilty pleas, more than 34 years of prison sentences, and an average age of approximately 46 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Lee Anglin, 50, was sentenced to 6 months in prison. He had been released from prison three years ago after serving 12 of his 15-year prison sentence for a $10 million real estate Ponzi scheme. He was sentenced again for after violating the terms of his probation by engaging in new money-making schemes that included providing legal services for inmates even though he isn’t a lawyer and negotiating to buy two businesses in Utah.

Robert Joseph Armijo and Joseph Financial Inc. were charged by the SEC in connection raising at least $4.85 million as part of the $170 million EquiAlt LLC Ponzi scheme. They sold securities to more than 50 investors and made about $1.1 million in commissions. The EquiAlt real estate scheme defrauded about 1,100 investors, many of whom were elderly.

Darrell Arnold Aviss, 63, of California, was indicted on allegations that he ran a $12 million Ponzi scheme. Aviss promised investors that their funds would be used to purchase annuities from Swiss insurance companies and that the annuities would pay interest rates ranging from 5% to 7%. Instead, Aviss used the funds to support his lavish lifestyle, including luxury car leases, expensive watches, trips to Monaco, and 20 tickets to a U2 concert and after-party.

Larry B. Brodman and Anthony Nicolosi aka Anthony Peluso agreed to pay disgorgement of ill-gotten gains in connection with an SEC action filed against them, without admitting or denying the allegations. The SEC alleged that Brodman and Property Income Investors LLC raised $9.06 million through 12 separate companies and that they defrauded 156 investors by promising returns from the purchase of residential real estate that would be turned into rental properties, but that they misappropriated about $1.12 million.

Steven F. Brown, 52, was sentenced to 4 years and 3 months in prison for running a $3.3 million Ponzi scheme. The scheme was run through Alpha Trade Analytics Inc., a financial consulting and investment company that Brown ran out of his house.

Phillip Wayne Conley, 38, of Florida, pleaded guilty to charges relating to a $5 million Ponzi scheme that defrauded 18 victims. Conley operated the scheme through Alpax and shell companies and represented that he managed multiple private investment funds. Conley issued false dividend statements claiming positive returns.

Larry Dela Cruz and Rick Rivera, along with 13 others, were charged by authorities accusing them of running a fraud through Pagudpud Sands Resort. The others named are: Louis Maser, Christopher Jaromay, Garry Gerardo, Bernard Campilan, Christela Balubar, Matt Rose, Marina Jaromay, Merito Jaromay, Gregory Pritchard, Juan Murillo, Thu Dang, Kristel Villar, and Nelson Manmano. The scheme recruited mostly elderly Filipinos and took in $5 million. Investors were promised returns from the supposed construction of the report when in reality the money went primarily to paying salaries and commissions to those who brought investors to the scheme.

Derline Cunningham, 60, of Greece, was charged in connection with a scheme run by Christopher Parris and Perry Santillo through Lucian Development. Cunningham was the branch manager of Bank of American and later of Citizen Bank and is accused of lying to another bank to allow millions of dollars in resolving credit to be extended. Lucian was accused of running a Ponzi scheme by selling fraudulent promissory notes to investors.  

Marc Lawrence, 55, of New York, was sentenced to 4 years and 7 months in prison in connection with a scheme run through a group of entities known as the Downing entities. Lawrence previously pleaded guilty to soliciting almost $10 million from approximately 40 investors through false and misleading statements. Lawrence ran the scheme with David Wagner, who was previously sentenced to 72 months in prison. The two promised returns from investments in healthcare start-ups referred to as “portfolio companies.” After lawsuits had been brought against the Downing companies, they started a new company called Cliniflow Technologies. Most of the $1.5 million raised by Cliniflow was transferred to other Downing entities.

Joseph Meli was sentenced to an additional 37 months in prison, but 25 of those will run concurrent to the 6 ½ year sentence he is currently serving in connection with the concert Ponzi scheme he previously ran. The scheme involved $104 million. 

Douglas A. Richardson, 47, of Missouri, was sentenced to 15 years and 8 months in prison without parole and ordered to pay about $8.8 million in restitution. Richardson ran a $12 million Ponzi scheme through Douglas A. Richardson, CPA, LLC. He was the former chief financial officer, treasurer and CPA of Smart Prong Technologies, Inc. and transferred at least $4.4 million from Smart Prong bank accounts to his personal and business bank accounts. Richardson also solicited funds from clients and induced them to make investments but in reality took some of the money for his own benefit.

William A. Sassman II, 53, of California, was indicted on charges that he was engaged in banking transactions with criminally derived property. In 2011, Sassman had been sentenced to 18 years in prison after he pleaded guilty to charges in connection with a Ponzi scheme that had defrauded at least 48 victims out of about $4.5 million.

Tyler Tysdal, 50, of Colorado, pleaded guilty to charges relating to a Ponzi scheme run with his business partner, Grant Carter, through Cobalt Sports Capital LLC. The scheme defrauded NFL quarterbacks and obtained more than $46 million from 77 investors. Tysdal also pleaded guilty to a second scheme in which he promised investors returns of 10 to 15 times their investment in connection with a private label wine scheme.

INTERNATIONAL PONZI SCHEME NEWS 

Australia

A smartphone App called the Hope Business App or the Hope Group Earning App is believed to be a Ponzi scheme that defrauded consumers out of $400,000.

Belgium

Authorities detained and searched the homes of 5 individuals who are believed to be engaged in the operation of a worldwide Ponzi scheme known as VITAE AG that defrauded 223,000 individuals in 177 countries. The alleged scheme was promoted under the website “Vitaetoken.io” and social media platform Vitae.co. Mendy Z. and Shrage P. were two of the arrested in connection with the cryptocurrency scheme.

Canada

Susan Elizabeth Way, 70, was sentenced to 3 years in prison for her role in a $27 million Ponzi scheme. Way previously pleaded guilty along with Arnold Breitkreutz in connection with their roles in their mortgage investment scam run through Base Financial.

Tyler William Young, 37, admitted that he defrauded investors out of more than $13 million and then funded a meth lab to try to pay them back. Bradley Wesley Oxby, 42, and Scott Riley Pring, 39, were previously charged in connection with the scheme.

England

Mitchell Mallin, 34, was banned for 14 years from acting as a director in the U.K. in connection with a £13 million Ponzi scheme.  Mallin promised returns from fixing and flipping dilapidated properties and ran the scheme through Essex and London Properties Limited

Guyana

Aubrey Norton and Martina Seepersaud were charged in connection with their role in a scheme run by Accelerated Capital Firm Inc. Cuban national Yuri Garcia Dominguez, 34, and Ateeka Ishmael, 32, were previously arrested in connection with the scheme.

India

Anand Konar, who is on the run, was accused of defrauding about 100 investors in an alleged Ponzi scheme.

Hemant Kumar Sinha was arrested in connection with an alleged scheme run though M.S.S. Ayurvedic Healthcare Trust. Rakesh Kumar Poddar and Mukesh Kumar Poddar were also accused in connection with the scheme.

Ranganath D S, 39, was arrested on charges that he defrauded over 2,000 investors in a cryptocurrency Ponzi scheme run through a website called Digitechmark

Nigeria

Benson Kufre John and Iraboh Joseph Eseosa were arrested in connection with an alleged N3.5 billion scheme run through Annexation Business Concept when United Bank of Africa filed a complaint regarding an account opened in the name of Annexation opened by Sunday Marcus. The account had a turnover of N3.5 billion in a six-month period. The scheme promised returns of between 30% and 200%.

Comedian Ogunleye Babatunde aka Oluwadolarz was arrested for endorsing and advertising a Ponzi scheme run through RackSterli at www.racksterli.org. The scheme was run by Chidi, known as Blackgold, and offered investors different packages. Investors are asking authorities to arrest other celebrities who endorsed the scheme.

Philippines

Reposco Trading aka Reposco.10 run by Benjamin Mari Limjap, has been flagged as running a Ponzi-like scheme. Investors were guaranteed returns of 20% within 90 days from investments in sports arbitrage, foreign exchange, and oil options.

Authorities warned that Xian Coin or XNC appeared to be a Ponzi scheme. The scheme is operated by “coffee date” scammer Xian Gaza aka Christian Albert Gaza. Investors were promised “a high range of price stability and appreciation of value due to the fact that it is taking advantage of a single, centralized supply chain” and is “independently controlled by virtual crypto currency bank of Xian Gaza with a limited global supply of 75 million XNCs.”

South Africa

Raees Cajee, 21, and Ameer Cajee, 18, two brothers, fled to the United Kingdom with 69,000 bitcoin (worth $3.6 billion) that they obtained through the platform known as AfriCrypt. Investors had been promised returns of 10% per day. The brothers told investors they were mining cryptocurrencies and had mined over 100,000 Ethereum coins using home-based computer systems. In April the brothers claimed that their investment platform had been hacked, advising their investors that this forced AfriCrypt to halt operations. Raees Cajee denied the allegations and says that the co-founders went into hiding after receiving death threats.

South Korea

V Global is being investigated as a cryptocurrency Ponzi scheme. About 70 employees have been booked, including the CEO, on allegations that the scheme defrauded about 69,000 people out of $3.6 billion. Victims are trying to slow down the investigation in the hope that they will triple their investments in 6 months.

Spain

Authorities recovered €6m that was lost in a Ponzi scheme run by Iban Juvanteny Gómez. Gómez has been in custody since 2019 on allegations that he was running a scheme that defrauded investors out of €15m by promising returns from investments in the stock market.


Monday, May 31, 2021

May 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for May 2021. The reported stories reflect at least 4 new Ponzi schemes worldwide, 1 guilty plea, about 77 years of prison sentences, and an average age of approximately 55 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Ted Brent Alexander, 55, and Jon Darrell Seawright, 49, of Mississippi, were indicted on charges relating to the $100 million scheme run through Madison Timber Properties LLC that was owned by Arthur Lamar Adams. The two solicited over $20 million from more than 50 investors in connection with the scheme. The scheme promised guaranteed returns to investors who thought they were lending money to a broker enterprise purchasing timber that was then to be marketed to multiple lumber mills.

Dean Alford of Georgia was indicted on charges that he ran a Ponzi scheme that defrauded investors out of several million dollars. Prosecutors allege that Alford created fake invoices, contracts and other documents purportedly showing that his company was owed money from state agencies. Alford was a member of the Regents, a 19-member board appointed by the governor, to oversee operations at the University System of Georgia. Last month Alford was ordered to pay about $10.8 million to 100 investors in a civil suit.

Jeremy Anderson, 50, of Florida was sentenced to 12 years and 7 months in connection with a scheme he ran through Tri-Med Corp. The scheme defrauded over 200 people out of more than $10.3 million by promising returns from an investment program that would purchase medical receivables backed by a letter of protection. Of the $17 million raised from investors, only $2.7 million was deposited into a trust account, $6.5 million when to salespeople and for personal use, and $2.3 million was paid to investors. Anderson had pleaded guilty earlier this year.

Cameron Banks aka Reggie Staggers aka Roy Hamilton, 36, of South Carolina, was sentenced to 9 years in prison. While Banks was out on bond for alleged fraudulent schemes relating to dental work and commercial vehicles, he operated a Ponzi scheme in which he promised returns to investors who thought there were investing in the operation of a commercial trucking business. There were at least 32 victims in the scheme. 

Trevon Brown aka Trevon James, Craig Grant, Ryan Maasen, and Michael Noble aka Michael Crypto were charged by the SEC in connection with the $2 billion Bitconnect Ponzi scheme. The scheme collapsed in 2018. The SEC alleges that the co-defendants unlawfully sold unregistered digital assets securities by promoting the Bitconnect lending program to retail investors. 

Jeffrey Carley, of Ohio, was charged with running a Ponzi scheme that involved about $100,000. Carley is the owner of Carley Financial Group and also owned all or part of Prosperity Partners and Main Street Solutions. The indictment alleges that Carley advised his clients to move money from their traditional retirement accounts to self-directed IRAs in which Carley would control.

Gina Champion-Cain, 57, of California was sentenced to 15 years in prison in connection with a $400 million Ponzi scheme. Champion-Cain had previously admitted that she raised more than $350 million from investors who were told she was making loans to business owners who were attempting to acquire liquor licenses.

Leonard J. Cipolla was ordered to pay restitution of over $5 million in connection with a CFTC action pending against Cipolla and his company, Tate Street Trading Inc. Cipolla admitted that he fraudulently received about $7 million in connection with futures and options pooled trading with Tate Street. He was previously sentenced to 121 months in prison.

Daryl Davis, 48, was sentenced to 13 years and 4 months in connection with a Ponzi scheme run through Financial Assurance Corp and Affluent Advisory Group LLC. Davis represented that some of the investments would be backed by a well-known multinational life insurance company, but the funds were not invested as promised. More than 25 victims were defrauded out of more than $5.1 million. 

Zacharay Horowitz aka Zach Avery, 34, was arrested in connection with the alleged scheme run through 1inMM Capital. Horowitz raised more than $690 million by representing that his company would buy film distribution rights and license them to Netflix and HBO, but the SEC says that he actually had “no business relationship with either company.” Money was used to fund Horowitz’s lavish lifestyle and to make Ponzi scheme payments to earlier investors. Investors are still owed $227 million. Horowitz pleaded not guilty.

Patrick O. Howard, 50, was sentenced to 5 years in prison and ordered to pay $13 million in restitution in connection with a Ponzi scheme run through Liquidity Partners CGF I, Insured Liquidity Partners CGF II, and Capital Ventures LLC. Howard pleaded guilty last year to running a Ponzi-type scheme that recruited about 119 investors to purchase $13 million in membership units. The companies promised 12% to 20% annual returns and Howard promised that investors could not lose money due to insurance that offset poor performance. 

Mark Johnson and his companies, the Owings Group entities, were ordered to pay the SEC $2.1 million for their role in a $5 million Ponzi-type scheme. 

Jonathan P. Maroney of Florida was charged by the SEC with running a Ponzi scheme through his companies, including Harbor City Capital Corp. The scheme allegedly raised at least $17.1 million from more than 100 investors. Investors were told that their funds would be used to finance the defendants’ online customer lead generation campaigns. Investors were promised returns ranging from 10% to 60% from the supposed resale of those leads to other businesses. The SEC alleges that Maroney misappropriated at least $4.48 million on her personal expenses and to purchase a waterfront home and a Mercedes, among other things. The SEC also names Maroney’s wife, Tonya Maroney, and Celtic Enterprises LLC as relief defendants.

Larry Ramos Mendoza was charged on allegations that he was running a $21.9 million Ponzi scheme through The W Trading Group. The scheme allegedly defrauded 235 investors by claiming that an algorithm made commodities trades that returns up to 4% per trade but that would stop trading if they lost 2% over a period. Investors were told that their money would sit in a TD Ameritrade brokerage account to be used exclusively for trades. 

Regine Norman aka Regine Ellis, 66, was charged with stealing more than $1.3 million from 14 victims in a fraudulent real estate scheme. The investor funds were supposed to be used to purchase discounted Brooklyn properties at a private auction but it is alleged that no properties were ever purchased. Norman allegedly provided victims fraudulent contracts for sale, forging the signature of the actual property owner. 

Shehzad Peermahomed, 50, of California, was arrested on charges that he stole millions of dollars from at least nine victims in a Ponzi scheme. Authorities allege that he defrauded victims into believing that they were investing in real estate from which they would receive monthly interest payments. The victims were mainly senior citizens and used their retirement savings to invest in the scheme. The losses are believed to be about $2.8 million.

Ruless Pierre, 51, of New York, was found guilty of running a Ponzi-style scheme that targeted the Haitian community. Pierre stole more than $2 million from about 100 investors. Pierre lost investor funds in unprofitable trading and spending on his own expenses, and falsely promising returns from the purchase of a fast-food franchise. 

Daniel Rivera, 51, of New Jersey, was sentenced to 6½ years in prison and ordered to pay $1.47 million in restitution in connection with a $2 million Ponzi scheme that targeted elderly investors. Rivera previously pleaded guilty to the scheme run through Robbins Lane Properties Inc. Rivera was the principal of Rivera & Associates and Strategic Wealth Partners, and he represented that Robins Lane invested in real estate ventures that were secure and guaranteed monthly returns. Robbins Lane, however, had no employees and no real estate portfolio.

Reva Joyce Stachniw, 69, of Illinois, and Ron Throgmartin, 57, of Georgia, were charged with running a Ponzi scheme. A third co-conspirator, Mark Ray, was previously charged. Authorities alleged that the defendants raised more than $650 million from investors, promising investors that their investments were backed by short-term investments in cattle. Ray had set up MR Cattle Production Services LLC in Colorado to help solicit investors. The defendants also solicited funds for a Colorado-based marijuana business, Universal Herbs LLC. Investors were promised returns of 10% to 20% over periods as short as a few weeks.

Marc Tager, 55, Jonathon Shoucair, 69, Matthew Mangrum, 51, and Kenneth Gross, 75 were sentenced in connection with a Ponzi scheme that defrauded 140 victims out of more than $8 million. Tager was sentenced to 43 months in prison, Shoucair to 6 years in prison, Mangum to 4 years in prison, and Gross to 2 years of probation. The four represented that they had created a plan to make money by extracting gold from dirt using a revolutionary process that used environmentally friendly means to recovery microscopic particles of gold from dirt. They ran the fraud through Jersey Consulting LLC.

INTERNATIONAL PONZI SCHEME NEWS 

Bulgaria

Mystery continues to surround the OneCoin scheme. Ruja Ignatova, the self-appointed “CryptoQueen” and her firm OneCoin was found in default after failing to respond to a case alleging $4 billion in losses. It is believed that Ignatova may have $500 million and 230,000 bitcoin.

Kenya

An app called “Amazon Web Worker” was called out as a Ponzi scheme before the app disappeared from the Google Play Store. People had deposited large sums of money on the platform based on promised returns of up to 38.5% for a deposit of seven days. It is not clear whether Google deleted the app or whether the developers intentionally removed it.  Stacey Marie Parker, 50, was arrested in connection with the alleged scheme.

Scotland

Alistair Greig, 67, had his 14 year jail terms but by four years. Greig had defrauded 165 investors by misrepresenting that he would place their money in a short-terms deposit scheme with the Royal Bank of Scotland for fixed periods of time.

Friday, April 30, 2021

April 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for April 2021. The reported stories reflect at least 4 new Ponzi schemes worldwide, 3 guilty pleas, about 22 years of prison sentences, and an average age of approximately 49 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

George S. Blankenbaker Jr., 54, of Indianapolis was charged and agreed to plead guilty in connection with an alleged Ponzi scheme run through Stargrower Commercial Bridge Loan Fund 1 LLC, Stargrower Asset Management LLC, and EDU Holding Trust. Blankenbaker is the president of Stevia Corp. About 109 people invested more than $11 million in the scheme and were told that their funds would be used to finance the use of shipping containers of food in the international consumer products market. Blankenbaker instead diverted funds for personal expenses and unrelated business ventures. A total of over $1.4 million was lost by 34 investors. 

Patrick Gallagher, 44, and Michael Dion, 49, were charged along with Dutch citizen Emade Echadi, in connection with an alleged scheme run through the foreign exchange company, Global Forex Management. They represented that investor funds would be used in an online trading platform, IB Capital. The scheme took $30 million from investors.

Tammy Lynn Hawk, 47, was sentenced to 10 years in prison in connection with a Ponzi-type scheme which flipped properties. Hawk was a real estate agent and defrauded at least 24 victims out of more than $500,000.

Zachary Joseph Horwitz aka Zach Avery, 34, was charged by the SEC on allegations that he was running a $690 million Ponzi scheme through his company, 1inMM Capital LLC. Horwitz allegedly misrepresented that investors were buying the rights to films that would be resold to Netflix and HBO, but no licensing deals for the movies existed. He promised returns in excess of 35% and showed investors falsified emails and agreements. Some of the investor funds were used to purchase a $5.7 million home, a $124,000 trip to Las Vegas, and $2.5 million for a celebrity interior designer. 

Steven LeProhon, 31, pleaded guilty to charges that he ran a Ponzi scheme through Steven LeProhon Marine and Motorsports.  LePhohon will serve 7 years of probation and 90 days in jail.

Douglas Lien, 79, of New Mexico was ordered to pay more than $10.3 million in connection with a Ponzi scheme that involved $14.2 million take from 45 investors. Lien admitted that he misappropriated client funds in a futures trading scheme that lasted almost 20 years. 

George Lindell, 73, was granted a compassionate release after serving about a third of his 17-year prison sentence. Lindell defrauded 166 people out of more than $25 million in a Ponzi scheme run through The Mortgage Store

Anthony Wayne March, 49, of North Carolina, was sentenced to 139 months in prison in connection with a scheme that was run through Asset Trader. March represented that Asset trader offered educational services to professionals and taxpayers and fraudulently induced investors to invest in Asset Trader. At least 22 investors invested over $8.1 million in charitable gift annuities and other products offered by Asset Trader. 

Bernard Madoff passed away in prison while serving a 150-year prison sentence. He was 82.  Madoff’s infamous Ponzi scheme defrauded investors out of more than $17 billion. 

Jonathan P. Maroney and Harbor City Capital Corp. were charged by the SEC who alleged that they raised at least $17.1 million from more than 100 investors in a series of fraudulent securities offerings. The SEC alleges that Maroney misappropriate at least $4.48 million of the funds. Maroney’s wife, Tonya Maroney, and Celtic Enterprises LLC were named as relief defendants. 

John Piccarreto Jr., 38, of New York, pleaded guilty to charges relating to his role in a Ponzi scheme run by Perry Santillo and Christopher Parris. The scheme defrauded victims out of more than $100 million. Investors were promised that their funds would be used to operate businesses such as financial services, insurance, real estate development and medical laboratories. They were issues fraudulent promissory notes from Lucian Development First Nationale Solutions, United RL Capital Services, and Percipience Global Corporation

David Gilbert Saffron was ordered to pay $32 million in connection with a cryptocurrency scheme that defrauded at least 179 investors.  The CFTC obtained a default judgment against Saffron and Circle Society, which was offering binary options on foreign exchange and cryptocurrency pairs. Investors were persuaded to invest in a commodity pool that promised returns as high as 300%.  

Scott Sands, 43, was charged in connection with a boat repair Ponzi scheme. Sands ran the scheme through Liberty Entrepreneurs, Inc. and Independent Salvage aka Hudson Marine Service, which ran a boat repair company. Sands took parts from one customer’s boat and used them on another, or he would sell their parts. Sands would delay returning customers’ boats while he stripped the boats of valuable parts. There were about 60 victims.  

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Monita Hung Mui Chan and Marie-Joy Vincent were fined in connection with their admitted role in a Ponzi scheme run by Daniel Rojo Fernandes Filho, that raised about $15 million from more than 1,400 investors around the world. The pair raised more than $330,000 from 52 investors. The scheme sold memberships in two companies that claimed gold mines.

Philippines

The SEC revoked the certificate of incorporation of Eco Hatchery and Trading Corp. due to an authorized investment scheme run under the guise of a prawn, shrimp, crab, and fish farm. Investors were promised guaranteed profits of 15% every 15 days for 4 months.