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

Thursday, March 31, 2022

March 2022 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps 

Below is a summary of the activity reported for March 2022. The reported stories reflect at least 15 new Ponzi schemes worldwide, 4 guilty pleas, more than 30 years of prison sentences, and an average age of approximately 56 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. 

Scott Allensworth, 68, of California, was sentenced to 33 months in prison and ordered to pay $2.3 million in restitution for his role in the Ponzi scheme run through Capital Growth Group Associates. The company provided financial services to clients. Allensworth, along with David Hunt Weddle, 66, defrauded clients through a private investment fund called JustInfo LLC. Investors were promised that their money would go into a brokerage account and that a special trading strategy would be used to limit their losses and generate monthly returns of between 5% and 20%. Over 50 victims were defrauded out of more than $2.3 million.

Americo “Rick” Antunes, 71, of Florida was arrested on allegations that he ran a Ponzi scheme through Platinum Bay Capital Management LLC. The scheme defrauded investors out of $2 million.

Darrell Arnold Aviss, 64, who was previously charged in a $12 million alleged Ponzi scheme faces new charges of failing to pay over $3 million in taxes and concealing bank accounts in Monaco.  The scheme promised to invest funds in annuities in Swiss insurance companies, but the funds were instead used to fund Aviss’ lavish lifestyle.

Matthew Beasley, 49, is under investigation for his role in an alleged $300,000 Ponzi scheme that operated in Nevada, Utah, and California. He is facing charges in connection with an FBI agent-involved shooting at his home. When the FBI arrived to investigate the alleged Ponzi scheme, Beasley pointed a gun at an FBI agent and was shot by an agent. A group of investors commenced a class action against Beasley alleging that Beasley, Jeffrey Judd, J&J Purchasing, and J&J Consulting defrauded them and promised investors returns of 10% to 20%.

Gordon Brad Beckstead, 57, pleaded guilty to charges relating to the Ponzi scheme run through BitClub. Beckstead admitted to helping the operators of the $722 million scheme conceal the scheme. He controlled the bank accounts associated with the scheme and the creator of the scheme, Matthew Brent Goettsche.

Vania May Bell, 57, the former comptroller and chief compliance officer of Executive Compensation Planners, Inc., pleaded guilty to participating in a conspiracy with her father, Hector May, in operating a Ponzi scheme. The scheme stole more than $11 million from more than 15 victims. They persuaded clients to withdraw money from their securities accounts with a broker-dealer and to invest in accounts at Executive Compensation Planners to invest in bonds. May was previously sentenced to 13 years in prison.

Robert Craig Bridgforth, of Missouri, and his company called Liberty Gold and Silver were the subject of an order to show cause why restitution, civil penalties and other administrative relief should not be imposed in connection with an alleged Ponzi scheme that defrauded investors out of at least $760,000 who were sold unregistered homemade “silver and gold certificates.”

Stephen Burton, 57, and James Wellesley, 55, were indicted on allegations that they ran a high-end wine Ponzi scheme through Bordeaux Cellars. The scheme took in $99 million from investors who thought they were providing loans to high-net worth individuals who had expensive wine collections that supposedly needed quick cash. Neither the loan recipients nor the wine collections existed.

Jeffrey Carley, 53, of Iowa, was sentenced to 5 years in prison and ordered to pay $1.36 million in restitution in connection with a Ponzi scheme run through Carley Financial Group, Prosperity Partners, and Main Street Solutions. Carley promised returns to victims by directing clients to move money out of traditional retirement accounts to “self-directed IRAs.”

Orazio DeGregorio, 45, was charged by the SEC with running a $1.2 million Ponzi scheme that targeted elderly clients between the ages of 78 and 94.

Kelly Gearhart was released from prison a year early from his 9-year prison sentence following an appeal. Gearhart ran a Ponzi scheme that defrauded hundreds of investors out of millions of dollars. 

Dwayne Golden, Gregory Aggesen, Marquis Egerton, and Indian national, Jatin Patel, were charged by both the CFTC and the Department of Justice in connection with an alleged scheme that defrauded investors out of over $23 million in Bitcoin and $21 million. They operated three digital asset scams through Empowercoin, Ecoinplus and JetCoin. Investors were told the returns were guaranteed and were promised a 200% profit in 90 days. 

Bradley R. Heinrichs, 41, of Idaho, was indicted on allegations that he ran a Ponzi scheme through Anthology Real Estate involving Arizona real estate. The scheme allegedly defrauded Christian families out of $82 million and promised returns of 25%. Heinrich’s business partner Stephen J. Hatch, 72, pleaded guilty in 2017. Heinrichs maintains that he is not guilty.

Dro Kholamian was sentenced to 4 years in prison and ordered to pay $755,000 in restitution in connection with a scheme run through his company, Blue Star. Kholamian solicited funds from investors in the Armenian community and he brought in $995,000 from investors for futures and foreign exchange trading. A consent order was entered in an action brought by the CFTC for solicitation fraud and misappropriation of client funds. 

Satish Kumbhani, 36, was charged in connection with the BitConnect Ponzi scheme with embezzling $2 billion. The scheme was a cryptocurrency Ponzi scheme that defrauded thousands of investors. Kumbhani is an Indian citizen and remains at large. He was sued last year by the SEC, along with Glenn Arcaro, one of the main promoters of the scheme.

Robert Mueller, a Texas attorney, was charged by the SEC with running a Ponzi scheme through Deeproot Funds. Deeproot bought life insurance viaticals, but collected $43 million after the last life insurance policy was purchased.  Deeproot has filed for bankruptcy.

Marco Perez, Jr. aka Sully Perez, 41, of Texas, was charged with allegations that he was running a Ponzi scheme through Permian Basin Proppants, Inc. Perez took in over $11 million for a scheme involving the resale of sand for fracking operations that was supposedly purchased at a discount. 

Gaylen Dean Rust, 62, was sentenced to 19 years in prison and ordered to pay $153 million in restitution in connection with a $200 million Ponzi scheme run through Rust Rare Coin in Utah. Rust, his ex-wife Denise Rust, and their son Joshua Rust, 39, were all indicted in 2019, and all three pleaded guilty to the scheme. The scheme defrauded 568 victims and involved a silver trading Ponzi scheme. 

David W. Schamens, 64, of North Carolina, was charged on allegations that he was running an alleged scheme through TradeStream TD Trading LLC, TFG Trading LLC, Analytics Ltd, Tradedesk Financial Group Inc, and others. He solicited investments into the Algo Fund, describing it as a “proprietary algorithmic trading fund managed by TradeStream. The fund was to use “state of the art servers” located in the same data center as the New York Stock Exchange and the NASDAQ. The scheme allegedly defrauded hundreds of investors out of $7 million and promised returns of between 12% and 30%.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Authorities warned against using Aweunion aka Awebuy, a company that has been called an online Ponzi scheme.  Authorities say that it falsely promises returns based on claims that its app purchases under-preforming products on Amazon to drive up popularity and spike consumer interest. Investors are promised commissions from their investments.

Charles Debono, 63, pleaded guilty to charges in connection with a Ponzi scheme run through Debit Direct that promised investors $.15 from every transaction with his debit machine business. The scheme involved more than 500 investors who invested more than $41 million. 

China

More than 10 suspects were arrested on charges relating to an alleged Ponzi scheme. A suspicious website recruited virtual currency investors and had more than 60,000 accounts with over $16 million invested. 

India

Braj Kishore Chaudhury was arrested on charges that he was running a Ponzi scheme that defrauded 6,000 investors. The scheme was run through Algo Academy.

Tapan Kumar Samanta, director of Mass Infra Realty Ltd was arrested on charges that he was running a Ponzi scheme. The company changed its name in 2012 to Human Welfare Credit & Thrift Cooperative Society Ltd.

Pranjil Batra was arrested in connection with an alleged Ponzi scheme run through Future Makers Life Care Private Limited. Batra is the software engineer who is accused of stealing funds from the company by creating fake IDs and using funds for his personal expenses.

Arpan Patel and Adyajyoti Nayak, directors of IAAVIC Pvt. Ltd, were arrested in connection with an alleged Ponzi scheme run through a fake stock market advisory company. They are accused of defrauding 400 investors.

Kamal K Bakshi, Paras Nath Singh, Pankaj Singh, Rakesh Singh, Rita Singh, Arvind Singh, Yogendra Pratap Singh, and Gurnam Singh were accused of running a Ponzi scheme through Unipay 2U Marketing Pvt Ltd and 2U Trading Pvt Ltd.

Kenya

An alleged Ponzi scheme called Bitstream Circle Limited, registered in the U.K., has collapsed and investors are unable to withdraw their funds. The director is listed as Quin Yang, of China. More than 11,000 investors who signed up in less than 4 months were promised daily returns of 5% to 8%

Nigeria 

Nurudeen Lawal Ekuma-Ezeogo Fabian Tochukwu was sentenced to 10 years in prison in connection with a scheme run though his Facebook account. Tochukwu created a fake Facebook account using the name Ogboi Ijeoma to defraud victims. 

Singapore

Authorities arrested eight men aged 18 to 30 who are suspected of running Ponzi-like schemes through an e-commerce affiliated business.