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

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

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

Friday, December 31, 2021

December 2021 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

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

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

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

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

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

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

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

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

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

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

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

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

INTERNATIONAL PONZI SCHEME NEWS 

Australia

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

India

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

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

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

Nigeria

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

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

South Africa

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