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. She also handles SEC and CFTC whistleblower claims. 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. 



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


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


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.


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.


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.


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. 


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.

No comments:

Post a Comment