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

Monday, February 28, 2022

February 2022 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for February 2022. The reported stories reflect at least 5 new Ponzi schemes worldwide, 3 guilty pleas, nearly 54 years of prison sentences, and an average age of approximately 53 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Rudy Avila, 69, of Texas was sentenced to more than 17 years in prison and ordered to pay more than $14,900,000 in connection with a scheme run through Starwood Asset Management Fund, Commodities Investment Group International, Trading Technologies Group, Trading Ventures Group, The L.I.F.T. Group, Capital Ventures Group, and Ventures Group, LLC. Avila regularly wired at least 90% of investor funds to bank accounts belonging to co-conspirators in Costa Rica. Eddie Alexander Contreraz and Ivan Aguirre, both pleaded guilty to charges relating to the scheme last year. 

Dawn Bennett, 58, had a judgment entered against her in connection with the Ponzi scheme she ran though DJB Holdings and DJBennett.com. Bennett is currently serving a 20-year prison sentenced and was ordered to pay $14.5 million in restitution. Bennett was a financial advisor and radio personality on the show, Financial Myth Busting, who told investors that her company would become a sportswear empire that would rival Under Armour. More than $20 million was received from 46 investors.

Bradley R. Heinrichs, 41, of Arizona, was indicted on charges relating to an alleged $82 million Ponzi scheme. Other alleged co-conspirators included Steven J. Hatch, 72, Stephen D. Hatch, Adam Hatch, Ryan Hatch and Jessica Hatch. The scheme involved the sale of Arizona real estate and promised double-digit returns to more than 110 investors. Stephen Hatch pleaded guilty in 2017 and was sentenced to 5 years in prison. Hatch’s children were not charged in connection with the plea agreement.

Joseph Hipp pleaded guilty to charges relating to his role in a $1billion Ponzi scheme run through Future Income Payments LLC. Co-defendant Scott Kohn ran the scheme that defrauded more than 90 investors. Hipp solicited investors into the scheme that defrauded many veterans of the United States Armed Forces. 

Brian Hughes, 57, of Connecticut, pleaded guilty to operating a Ponzi scheme that defrauded investors out of $900,000. The scheme has been called unpatriotic as the scheme solicited investors into a pro-veteran vodka company, Handcrafted Brands, LLC. Hughes sought investor funds to buy Salute American Vodka but then used much of the money to pay his credit card and tax bills.

Zachary Joseph Horowitz aka Zach Avery, 35, was sentenced to 20 years in prison and ordered to pay more than $230 million in restitution in connection with the $650 million Ponzi scheme that defrauded more than 200 investors. The scheme involved sham film licensing deals and was run through 1inMM Capital LLC. Horowitz promised returns from the supposed license of film distribution rights to movies to NetFlix and HBO. No business was actually done with those companies.

Satishkumar Kurjibhai Kumhani, 36, of India, was indicted in connection with the $2.4 billion BitConnect Ponzi scheme. The indictment follows the guilty plea of BitConnect’s lead promoter, Glenn Arcaro. The scheme claimed to use proprietary technology known as the BitConnect Trading Bot and Volatility Software to supposedly generate substantial returns and guaranteed profits. 

James Moore, 60, was sentenced to more than 11 years in prison and ordered to pay approximately $57.5 million in restitution in connection with a $50 million Ponzi scheme run through Bar Works, Inc. The scheme defrauded more than 800 investors and involved a co-working space company. Moore was previously found guilty on criminal charges relating to the scheme. Moore had previously partnered with Renwick Haddow, 53, in 2009 to sell  investments in a hotel scheme. In 2015, they partnered again to solicit investments in Bar Works. Haddow used the alias Jonathan Black, with the knowledge of Moore, and Moore used his company, United Property Group, to solicit investors with false information.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Charles DeBono, 62, pleaded guilty to charges relating to a Ponzi scheme that brought in $40 million to $48 million. The scheme defrauded more than 500 people and involved a point-of-sale device that he claimed was used in stores across Canada.

England

Stephen Grail, 58, was sentenced to 5 years and 11 months in connection with a Ponzi scheme that ran for 20 years. He claimed he was investing the victims’ money in pensions and loans for them but instead the money was used to fund his lifestyle and a failing business.

Mitchell Mallin, Abdul Mukith, and Anthony Whymark were accused of running a scheme through Essex and London Properties Ltd. The scheme promised 8% to 12% returns from the supposed purchase and resale of residential properties. More than 800 people were defrauded.

India

Sarat Kumar Nayak and Prabhat Ranjan Das were arrested on charges that they defrauded approximately 500 investors in a scheme run through Auroxa Deal Multitrade Private Limited

Kishore Kakde was arrested on allegations that he was running a scheme through Kaak Economic Marketing Pvt Lt. Kakde ran a number of schemes, one of which promised returns of 1,000%.

Sunita Saini, 48, was arrested in connection with a scheme run through Vasundhara Fintech Ltd and M/s Anakaya Nidhi Ltd and defrauded more than 700 victims.

Vietnam

Vo Thanh Long and 9 accomplices were charged in connection with a $7 million alleged real estate Ponzi scheme that defrauded 817 people. The scheme was run through Cao Thang Real Estate Company that promised 20% returns to investors.