By Kathy Bazoian Phelps
Below is a summary of Ponzi scheme activity reported for July 2024. There were at least 13 new Ponzi schemes revealed this month. Ponzi schemers received more than 22 years of prison sentences plus one life sentence. There were 4 guilty pleas. The average age of the fraudsters was about 54 years old. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
Roosevelt Tobias Bailey, 68, of Georgia, and his company Borg Investment Bank & Capital Trust, were charged by the SEC in connection with a fraudulent prime bank and gold and diamond investment scheme, along with Alvin C. Jones, Esq., of Florida, for aiding and abetting the scheme. They raised more than $1.6 million from at least 26 investors, and Jones, an attorney, allowed the investor money to flow through his trust account.
Michelle Bisnoff aka Michelle Angeline Silverstein aka Shelly Silverstein, 57, of Florida, was arrested on charges that she defrauded investors out of $2 million. Bisnoff owns ESOS Rings, Inc. and represented that ESOS owned patents for “smart rings,” a wearable device that could be used to make contactless payments. ESOS did not actually own the patents.
Ricardi Celicourt, 40, and Brisly Guillaue, 39, of Florida, were sued by the SEC on allegations that they were running a Ponzi scheme through Royal Bengal Logistics, a trucking and logistics business. The scheme allegedly defrauded Haitian-American victims. The SEC alleges that they helped raise nearly $109 million from 1,500 investors. The scheme was led by Sanja Singh, 43.
James M. DelVerne, 54, Doug Miller, 60, Gary Rathbun, 67, and Nancy Rathbun, 72, and John T. Walters, 53, were indicted on charges relating to the Eliyahu Weinstein Ponzi scheme. The scheme allegedly defrauded at least 200 people out of $72 million.
Yossi Engel had a final judgment entered against him in an action by the SEC. Engel ran a $47 million Ponzi scheme through iWitness Tech, LLC that targeting members of the orthodox Jewish community. Engel first represented that he would purchase and install security equipment, and later represented that he would purchase property in Israel, develop it and then resell it.
Vitaly Fargesen, 54, and Igor Palatnik, 49, were sentenced to 4 years and 6½ years in prison, respectively, for their role in the fraudulent scheme run through CanaFarma Corp., later known as CanaFarma Hemp Products Corp. They represented that CanaFarma was a “fully integrated cannabis company addressing the entire cannabis spectrum from seed to delivery of consumer products.” The scheme lured in $14 million of investor funds.
Debra Mae Carter, 65, of Texas, the mistress of William “Doc” Gallagher, 83, was sentenced to three life sentences in connection with a scheme that exploited the elderly. Gallagher hosted a radio show and called himself “the Money doctor.” The scheme took in more than $31 million over 10 years and defrauded more than 170 mostly retired investors. Carter laundered the money through rental homes and fake charities, among other things.
Johanna Michely Garcia, 41, of Florida, pleaded guilty to charges in connection with a $190 million Ponzi scheme run through MJ Capital Funding. Garcia called herself “Mother Teresa” in Florida and represented that she was loaning small businesses money they needed to operate. Garcia’s co-defendants, Christian Gonzalez and Pavel Ruiz Hernandez, were previously sentenced in connection with the scheme. Even after MJ Capital was shut down by the FBI in 2021, the three began running the fraud through New Beginning Global Funding, New Beginning Capital Funding, Lion Heart Capital Group, GMR Remodeling, and Group Management.
Sam Ikkurty, of Oregon, and his firms, Jafia LLC, Ikkurty Capital LLC, Rose City Income Fund, Rose City Income Fund II, and Seneca Ventures, were ordered to pay restitution of almost $84 million and disgorgement of almost $37 million in connection with a cryptocurrency Ponzi scheme. The scheme promised investors returns from 15% to 2,708% returns from a $100 investment in stake mining and digital tollbooths. The CFTC had charged Ikkurty and Ravishankar Avadhanam in 2022 for conducting a deceptive scheme that solicited about $44 million from at least 170 investors. A court in Illinois determined that two altcoins in the scheme, OHM and KIMA, were commodities.
Adrian J. Kawuba, of Massachusetts, had a final judgment entered against him in a case filed by the SEC in connection with a $2 million securities Ponzi scheme. Kawuba had promised investors return of 25% to 59% in as little as 12 days to 7 months and that he was using the funds to finance short-term projects related to youth sports, entertainment events, and private soccer clubs. Kawuba had been sentenced to 27 months in prison in April in connection with the scheme.
Bradley J. Konorman and Adam R. Salon, of Ohio, were charged in connection with an alleged Ponzi scheme that defrauded at least 200 victims out of more than $72 million.
Francius Marganda, 41, an Indonesian national, pleaded guilty to charges in connection with a $23 million Ponzi scheme that defrauded more than 400 victims. He targeted the Indo-American victims through two sham loan programs called Easy Transfer and Global Transfer. He falsely represented that they were short-term, high-interest loan programs.
John N. Matson, 67, of California, and his company, South Bay Acquisitions, LLC, were charged by the SEC on allegations that they were running a scheme that raised approximately $1,535,000. Matson promised investors returns of 12% to 20% from LLC Bonds that were functionally like promissory notes.
Briton James Moore, who was convicted in connection with the Bar Works Ponzi scheme in 2022, died in prison three years into an 11-year sentence. The scheme defrauded more than 800 people out of $58 million. The scheme had offered returns from hot-desking space in refurbished bars and restaurants around the world. The ringleader, Renwick Haddow, 55, is yet to be sentenced. Moore’s co-conspirator Savraj ‘Sam’ Gata-Aura was sentenced to 4 years in prison in 2020. UK citizens James Robinson and David Kennedy pleaded guilty earlier this year.
Timothy Andrew Nemeckay, 64, of Utah, was sentenced to one day in prison and 24 months of supervised release and ordered to pay approximately $1.7 million in restitution following his admission that he misappropriated approximately $1.7 million from investors. Nemeckay had promised returns from investments in Mine Shaft Brewing. The scheme defrauded 100 investors.
Robert Newell, 63, of California and his company, Black Hawk Funding, were sued by the SEC on allegations that they raised $37.7 million from about 200 investors. Newell originally focused on the real estate industry but pivoted to cannabis when it was legalized in California. Newell was financial advisor to three funds, Verde Ventures Inc., Verde Holdings Inc., and Verde Partner Inc. Newell also used National Asset Valuation Services to misappropriate funds. They promised 10% annual returns.
Mark Nordlicht was sentenced to 6 months of home confinement after he was found guilty of fraud in connection with the Platinum Partners Ponzi scheme. Nordlicht and David Levy were convicted on charges that they diverted proceeds from the sale of assets held by Black Elk Energy Offshore Operations LLC, a company in Platinum’s portfolio, and defrauded bondholders by funneling $70 million to Platinum. David Small, a Platinum manager, was convicted in 2022.
Nestor Nunez aka Salvador Molina, 66, and Antonio Perez Hernandez, 49, pleaded guilty to charges relating to the Forcount Trader Systems Inc. cryptocurrency Ponzi scheme. The scheme was based in Brazil and defrauded Spanish-speaking investors out of $8.4 million. Nunez, an actor, pretended to be the fictitious Forcount CEO “Salvador Molina.” Francisley Da Silva, 39, was the ringleader of the scheme and was arrested in 2022. Juan Tacuri, 46, pleaded guilty in June.
Michael Rabb, an attorney, pleaded not guilty to charges that he operated a Ponzi scheme through Isotex Health, LLC. Rabb was charged along with Byron Gruber, Jason Bradley Cross and Eugene Elfrank.
Babu Ramaraj, 46, of Virginia, was charged by the SEC in connection with an alleged $31 million Ponzi scheme that defrauded over 70 investors. Ramaraj claimed that his company, DAB Inspection and Consulting Services, LLC, was doing civil engineering inspection work on federal and state projects. The SEC alleged that the contracts never existed, and Ramaraj created phony contracts and subcontractor invoices to defraud investors. Criminal charges were also filed in June.
Brian Simms, 46, of Indianna, was sentenced to 7½ years in prison and ordered to pay $2.6 million in restitution following his guilty plea for running a Ponzi scheme through Brendanwood Brokerage. Simms defrauded at least 22 victims by convincing them to liquidate traditional 401(k) accounts and life insurance policies and to deposit those funds with Brendanwood. Simms took in almost $4 million from his victims.
Paul Horton Smith Sr., of California was barred by the SEC for his role in that $24 million Ponzi run through Northstar Communications LLC, Planning Services Inc. and eGate LLC. Smith had previously pleaded guilty to defrauding at least 35 investors out of $5.6 million.
Tilila Siola Walker Sumchai, 61, was charged in connection with an alleged Ponzi scheme that defrauded more than 1,000 people out of $13 million. Sumchai solicited Tongan investors and claimed to use a secret algorithm in her “Tongi Tupe” investment program that promised large returns within weeks or months.
Abner Alejandro Tinoco and his company Kikit & Mess Investments, LLC were ordered to pay over $31 million in penalties in connection with a foreign currency and cryptocurrency Ponzi scheme. The scheme defrauded 199 victims who invested over $7.2 million into the scheme. Tinoco previously pleaded guilty to the scheme and was sentenced to 7 years in prison.
INTERNATIONAL PONZI SCHEME NEWS
Australia
John Bigatton was sentenced after pleading guilty to providing unlicensed financial advice in connection with the BitConnect Ponzi scheme and BCC token. BitConnect had presented itself as a crypto lending platform and defrauded investors out of $2.4 billion. Bigatton was released without prison time on the condition he pay a security of $100 and comply with a good behavior period of three years.
Canada
Curtis Quigley, drowned in a river while awaiting trial on charges that he and Kathleen Treadgold had run a $7.8 million Ponzi scheme for 12 years. They had allegedly run a real estate fix and flip scheme, and the trial was set to begin in 2025. Quigley was 56 at the time of his death.
England
Elliot Gunton pleaded guilty to running a crypto Ponzi scheme using a Coinbase dummy website. He was sentenced to 3 ½ years in prison. Gunton is a computer hacker who stole more than $900,000 from more than 500 Coinbase accounts.
India
Raeesa Khan Poonawala, 46, and her husband Mustafa Baig were charged on allegations that they were running a Ponzi scheme that promised 150% in 90 to 100 days. The scheme is believed to have defrauded 444 people.
K D Prathapan was arrested in connection with an alleged Ponzi scheme run through Highrich Online Shoppe. After Prathapan’s accounts were frozen, he allegedly relaunched his scheme under the name HR Innovation.
Authorities filed a complaint against Radhe Shyam and Bansi Lal for allegedly running a Ponzi scheme through Future Maker Lifecare Private Limited, Hisar, and M/s FMLC Global Marketing Private Limited. The scheme promised returns of up to 5 to 8 times the principal investment amount in two years.
Ashish Shah, 44, was arrested on allegations that he was running a Ponzi scheme promising investors 84% returns from the stock market.
Philippines
Bernadeth Albaracin and John Mark Pineda were arrested on allegations that they were running a Ponzi scheme through Skyline Trading aka Hybrid Trading aka Neon Marketing. The scheme allegedly promised returns of 35% to 50%.
The SEC warned against investing in Safe District Enterprise as it is not authorized to solicit investments from the public. Safe District is owned by Rexon G. Cortez and Lovely Charisma S. Cortez. Investors were promised 5% to 12% profits monthly.
Spain
Stijn Vanstraelen, 45, was arrested on allegations that he ran a multimillion-euro cryptocurrency Ponzi scheme. The scheme took in at least 24 million euros, and investors were promised returns from investments in cryptocurrencies, which included connections to Nanocoin, Nanoclub and CryptoTrain. Victims were unable to access their funds due to blocked cryptocurrency wallets.
Thailand
Pimprapassorn Jaemjaras, 44, was arrested on allegations that she was one of the operators of a Ponzi scheme known as OD Capital. The scheme promised returns of 10%.
