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

Kathy is a senior business trial attorney with more than 28 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

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. 

Wednesday, March 31, 2021

March 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for March 2021. The reported stories reflect at least 5 new Ponzi schemes worldwide, 3 guilty pleas, about 50 years of prison sentences, and an average age of approximately 47 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Jose Angel Aman, 51, of Florida, the co-founder of Argyle Coin, was banned from the securities industry but also released from an obligation to pay a $4.5 million fine to the SEC after more than $23.8 million was paid to the SEC in restitution in a parallel case. Aman operated three successive Ponzi schemes and was sentenced to 7 years in prison in 2019.

Gina Champion-Cain, 57, of California was sentenced to 15 years in prison in connection with a Ponzi scheme run through American National Investments and ANI Development. The scheme took in at least $372 million from more than 490 investors and caused losses of $180 million. Champion-Cain promised high returns from supposed high-interest loans to license applicants who needed money while their applications were pending before the state Department of Alcoholic Beverage Control.

Natalie Cochran, 38, of West Virginia, was sentenced to 11 years and 3 months in prison in connection with a $2.5 million Ponzi scheme that she had run with her late husband, Michael Cochran. The scheme was run through Tactical Solutions Group and Technology Management Systems, and the pair said they had contracts to provide weapons to the U.S. Department of Defense.

Chris A. Dantin, Christopher D. Dantin, David P. Ortiz, and Andrew L. White were charged by the SEC for their involvement in the alleged $320 million scheme run through 1 Global Capital that defrauded 3,600 investors. The scheme was run by Carl Ruderman and promised returns from short terms loans to small and medium sized businesses. The four sales agents earned commissions in connection with the sales of the investments when they were not registered as broker-dealers.

Shawn C. Cutting, of Idaho, was the subject of an emergency enforcement action brought by the SEC. Cutting allegedly raised $6.9 million for a fraudulent digital asset investment pool and represented that he was an experienced financial advisor to raise funds from over 450 investors. His wife, Janine Cutting, and Crypto Traders Management and Golden Cross Investments are listed as relief defendants.

Damon Elliott and his company Piptastic Ltd, a London-based trading and investment firm, had default judgment entered against them in connection with an SEC complaint alleged they ran a speculative trading Ponzi scheme. Elliott solicited investors to engage in spread trading or spreadbet trading.  About $9 million was raised from investors. Piptastic must pay more than $7.7 as a civil fine on top of a $16.3 million judgment.

Andres Fernandez, 38, was sentenced to 10 years in prison and ordered to pay $31 million restitution. in connection with a scheme he ran through Kadaae Entertainment. Fernandez defrauded at least 81 people by telling them that his company produced events with top artists when, in reality, he had no affiliation with any major musicians. 

Tytus W. Harkins, 38, of Colorado, and his company, Hartman Wright Group LLC, lost against the SEC’s claims relating to an alleged $8 million Ponzi scheme. The scheme involved mobile home parks. 

Tanmaya Kabra, 27, reached a plea deal relating to a scheme that promised returns of up to 32% from supposed investments in startup companies. The scheme involved at least $250,000. 

Scott Kohn was ordered to pay $501 million in a case brought by the Consumer Financial Protection Bureau. Kohn and his companies bought and sold military veterans’ benefits and deceived veterans by promising them exorbitant interest rates associated with cash advances. They were ordered to pay $65 million in penalties and $436 million in restitution to thousands of veterans and pensioners.

Al Parish, 63, who spent over a decade in prison for his involvement in a Ponzi scheme, was granted a compassionate release. He served 153 months of his 249-month prison sentence. About 500 investors lost $64 million in connection with the scheme

Matthew R. Peterson, 51, of Missouri, was sentenced to 8 years and one month in prison and ordered to pay approximately $2.5 million in restitution in connection with a $6 million Ponzi scheme. Peterson previously pleaded guilty to running a sports betting fraudulent investment scheme in which he created fictitious spreadsheets, financial statements, and betting reports. The scheme defrauded at least 37 investors. 

Benjamin Reynolds was ordered to pay $572 million in penalties and restitution in connection a Bitcoin Ponzi scheme. Reynolds was the director of trading firm Control-Finance Ltd. and lured over 1,000 clients to deposit 22,858 bitcoins that were at the time worth $143 million and are now worth closer to $1.3 billion. Investors were promised 1.5% returns a day, or 45% per month.

Robert W. Walton Jr., of Ohio, was indicted in connection with an alleged Ponzi-like scheme run through Hadsell Chemical Processing, a chemical processing company. Walton raised $12 million by selling promissory notes to 65 investors with promised returns of 10% to 15%.

Anthony Zacharias, 49, was sentenced to 5 ½ years in prison in connection with a travel agent Ponzi scheme that left clients stranded overseas. Zacharias hid the fraud from his company by using false credit cards and separate phone numbers and by telling clients not to contact the business and deal with him directly. 

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Arnold Breitreutz and Susan Elizabeth Way each pleaded guilty in connection with a scheme run through Base Financial Inc. They pleaded guilty in connection with the scheme that defrauded 107 people out of $27 million. Investors were promised returns from investments supposedly secured by first mortgages on residential properties. 

Brian Kitts, 65, and his wife, Shannon Kitts, 55, were charged in connection with an alleged $4.3 million Ponzi scheme run through Vesta Capcorp Inc. and Vesta Equity Partners. The scheme alleged defrauded 38 investors by promising returns at a monthly rate as high as 20% through what were supposedly real estate financing firms.

China

Seven people were taken into custody in connection with an alleged Ponzi scheme run through an automobile club. The suspects ran a car dealership called “Yuelong” and promised high returns for recruitment of new members. More than 3,700 people participated and over $1.5 million was collected. 

India

Niftech Global Private Limited is being investigated as a possible Ponzi scheme. Investors were promised monthly returns of 4%

Authorities warned about alleged fraudulent schemes run through Oksome.in and ‘Super like.’

G. Ramesh, the managing director of Universal Trading Solutions Pvt Ltd., was detained on allegations that he defrauded over 1,000 investors. 

Sudeer Muhammed Cheriya Vannarakkal was arrested in connection with a scheme called Forex Trade that promised investors 2% per month. 

Nigeria

Maryam Abu Shinga was convicted on charges that she ran a scheme promising 300% profit to investors. Investors were promised returns from a gold mining investment, but the funds never went into the investment.

Singapore

Ng Yu Zhi, 33, was charged in connection with a scheme run through Envy Asset Management and Envy Global Trading that involved at least $1 billion. About $300 million of the $1 billion invested was transferred to Zhi’s personal account, and about $100 million of his assets have been seized by authorities. 

Thailand

Sawika “Pinky” Chaidet, along with her mother Sarinya and brother Sarayut, were charged in connection with the Forex-3D scheme. The Forex-3D was run by Apiruk Kothi aka Apiruk Krub, and defrauded about 9,700 investors out of 1.9 billion baht (over $66 million). The scheme offered investors 60% to 80% returns in foreign currency investments.  


Sunday, February 28, 2021

February 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for February 2021. The reported stories reflect at least 3 new Ponzi schemes worldwide, 1 guilty plea, over 62 years of prison sentences, and an average age of approximately 51 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.  

Edison Denizard, 41, of Florida, was sentenced to 4 years and 9 months in connection with a music concert scheme. Denizard, along with his co-conspirator, Andres Fernandez, represented that investor funds would be used for specific music concerts by top artists. Victims lost about $7.5 million in the scheme. Fernandez previously pleaded guilty and was sentenced last year to 10 years in prison. 

Steven G. Dubin, 66, of Pennsylvania, was sentenced to 18 months in prison and ordered to pay $74,800 in restitution in connection with a Ponzi scheme. Dubin previously pleaded guilty to wire fraud in connection with the scheme. He is a disbarred adoption lawyer and had taken deposits from clients, promising the funds would be held in escrow accounts for future expenses during the adoption process. 

John Fox, 70, of California, the former operator of the wine Ponzi scheme run through Fox Ortega dba Premier Cru, was released from prison a year early from his six and a half year prison sentence. Fox had pleaded guilty to running the scheme and was ordered to pay $45 million to more than 9,000 victims. Fox admitted to selling phantom pre-arrival wines to customers and that he would use the money to pay off suppliers or to buy wine to give to customers who were complaining about not getting the bottles they ordered. Fox used about $5 million to fund his lavish lifestyle, including luxury cars, a high-end home, and about $900,000 meeting women online. Fox and Premier Cru had declared bankruptcy which revealed more than $70 million in debt and only $7 million in assets.

David Gentile, 54, Jeffrey Lash, 51, and Jeffry Schneider, 52, were arrested and charged in connection with an alleged Ponzi scheme run through GPB Capital. The criminal charges follow investor lawsuits and regulatory actions against GPB, which allegedly defrauded 17,000 victims. The scheme raised $1.8 billion and promised investors 8% returns from the firm’s holdings, which included a group of car dealerships and investments in waste management and healthcare sectors. Gentile was the CEO of GPB, Lash was the managing partner, and Schneider owns GPB’s placement agent, Ascendant Capital LLC. Gentile and Lash pleaded not guilty to the Ponzi-like scheme. The SEC requested the appointment of a monitor in the case, which was granted.

Guy Scott Griffithe settled charges brought by the SEC that he was running a Ponzi scheme through his marijuana business. The SEC had accused Griffithe or running a $4.8 million Ponzi scheme. Griffithe and Robert William Russell and the companies they respectively controlled, Renewable Technologies Solution, Inc., Green Acres Pharms, LLC, and SMRB, LLC, defrauded at least 25 investors out of approximately $4.85 million. Without admitted or denying the allegations, Griffithe agreed to pay disgorgement and to be permanently barred from the securities industry.

Craig Harbaugh, 45, of Nebraska, pleaded guilty to charges that he was running an $11 million Ponzi scheme. Harbaugh admitted to falsifying purchase orders and contracts for his business, Tactical Solutions Gear LLC, a federal firearms licensee, to contract with government and commercial entities for purchases of guns, ammunition, and other equipment. He ran the scheme while serving as a sheriff's deputy.

Minish “Joe” Hede and Kevin Graetz agreed to disgorge a combined $1.37 million in connection with the SEC’s allegations that they sold unregistered securities to victims of a $22 million Ponzi scheme. The scheme was run through Belize Infrastructure Fund LLC, operated by Brent Borland, and investors invested in a purported airport project in Belize.

Leroy King, 75, was sentenced to two consecutive 5 year prison sentences for his role in the R. Allen Stanford Ponzi scheme. King is the former chief of Antigua’s Financial Services Regulatory Commission and had previously pleaded guilty to one count of conspiracy to obstruct a U.S SEC investigation of the scheme.

Jose Anibal Linares, 42, was sentenced to 5 years in prison and ordered to pay $2.3 million in restitution in connection with a $2 million scheme that has been described as Ponzi-like. Linares operated the scheme through JC Loans Finance and Inversiones JC Dallas, and admitted that he falsely told investors that their funds were insured by the FDIC. He represented that he was investing their funds in commercial and residential real estate, including a water resort and shopping centers in Honduras. He used funds on personal expenditures and sent money to family members in Honduras. Linares is a Honduran citizen living in the U.S. who may be subject to removal from the U.S. after serving his sentence. 

Patrick Lindsey, 43, was sentenced to 27 months in connection with a scheme run through MGT Construction. Lindsey helped orchestrated a five-year scheme that made it appear that the construction company was profitable when expenses were really just being moved on the books. Lindsey has maintained that he was just following his boss’s orders.

Deanna Martinez was arrested in connection with an allegedly fraudulent scheme run through D & S Multi-Services

Shaun Modra, 61, was jailed for 9 years in connection with a real estate scheme run through City Southside Real Estate. Modra represented that investors would receive returns from opportunities in rent roll, a portfolio of rental properties managed by a real estate agency on behalf of landlords. Modra had previously pleaded guilty to charges related to the scheme. 

Howard L. Young, of Tennessee, was charged in connection with an alleged Ponzi scheme run through Integrative Medical Services, a purportedly holistic wellness business. Defrauded victims included cancer patients, financial institutions, and investors, who lost $700,000. Young claimed he had cured himself of cancer using naturopathic methods. He also claimed that Vanderbilt University had awarded him a $2 million grant to study cancer patients but that the university required an upfront payment of $10,000 that would be refunded at the end of a year.

INTERNATIONAL PONZI SCHEME NEWS 

Argentina

Authorities are investigating Ganancias Deportivas, a sports-related investment site, as a possible bitcoin scam. Returns of 20% monthly to 240% annually were promised to over 41,000 investors, and investors were asked for a one-time payment of 100 euros to join the site. Investors cannot withdraw their initial investment for 6 months. The site states that it is a “networking company” that invests in sports betting on soccer.

Columbia

David Wigoda Rinzler was sentenced to 13 years in prison in connection with an alleged Ponzi scheme run through Factor Group. The scheme defrauded more than 1,550 people out of approximately $143 billion pesos (over $40 million).

Finland

Authorities warned the public against dealing with Wiseling Online Investment, which is not licensed and might be a Ponzi scheme. Wiseling is a Finnish-based company operating in Ghana and is not licensed to carry out investment activities.

Ghana

Authorities warned the public against doing business with Chinese company, Chy Century Heng Yue Group Limited and Siaruir-Commerce Ghana Limited. The companies were registered as online trading and marketing services.

India

Sanjeev Upadhyay was arrested in connection with an alleged scheme run through M/s Great India Expo. He promised investors 200% guaranteed returns.

Arun Mukherjee, the director of Rose Valley Group of Companies, was convicted and sentenced to 7 years in jail. Mukherjee admitted he was guilty during the hearing.

Gopal Dalapati, 41, was arrested on allegations that he defrauded 80 people out of ₹ 8 crore through his company, M/s weird Infrastructure Corporation Ltd & Weird Industries Ltd. His three associates - Amarendra Prasad Singh, Bharat Kumar and Sanjay Kumar Das - have already been arrested.

Israel

Amir Bramly was sentenced to 10 years in prison in connection with a fraudulent scheme run through Rubicon Business Group and Kela Fund.

Philippines

Arnel Gacer, 39, was captured after 7 years on the run in connection with an alleged Ponzi scheme run through One Dream Global Marketing Inc.

Authorities warned the public against certain possible Ponzi or other fraudulent schemes and issued a warning about the following companies: Jams Mart, Solmax Global Limited, Igniter 100, and BitAccelerate. Jams Mart is headed by Niño Luis Jamili. Solmax and Igniter 100 are operated by Florian Krueger, Serge Meulenbelt, Abdul Rehman Sandhu, Steven Lubka, Thelma Dhlovu, Aarron Bates and Asim Mirza.

Authorities revoked the certificate of incorporation of Chiyuto Creative Wealth Documentation Facilitation Services for operating an unauthorized investment program that appears to be a Ponzi scheme. Chiyuto and its single stockholder, Patrocenio Calvez Chiyuto Jr., were fined in connection with the scheme. Chiyuto was offering 100% returns in one day by offering and selling securities through a double-your-money roulette game. Additionally, 5% referral commissions and raffles offering new cars and motorcycles were offered to attract more investors.

Singapore

Iseli Rudolf James Maitland, 59, and Malaysian How Soo Feng, 44, went on trial on charges that the engaged in a multi-million Ponzi scheme that defrauded more than 2,000 investors. The alleged scheme was run through The Gold Label, where investors were promised returns from the gold buyback program.

Thailand

Wesley Anton Dirkjan Halbach, 37, a Dutch National, was arrested as he attempted to flee Thailand to head to the Netherlands. Halbach is being investigated in connection with an alleged ฿100 million scheme run through SPM Shopping Mall. The funds were taken from up to 10,000 investors and were moved offshore to as many as 44 different bank accounts at 4 different banks.