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

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 NiƱo 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.