By Kathy Bazoian Phelps
Below is a summary of Ponzi scheme activity reported for October 2024. There were at least 9 new Ponzi schemes revealed this month and 4 guilty pleas. Ponzi schemers received more than 86 years of prison sentences this month and the average age of the fraudsters was about 46 years old. Please feel free to post comments about these or other Ponzi schemes that I may have missed.
William Berg, 52, was sentenced to 9 years in prison after pleading guilty to defrauding investors out of more than $2 million. Berg was a financial advisor who sold life insurance and other financial products. He solicited investments from at least 17 clients to invest in two shell companies he secretly owned.
Russell Todd Burkhalter, 52, denied all wrongdoing by him and his company, Drive Planning LLC, in response to SEC allegations that they were running a Ponzi scheme that involved $300,000,000. The SEC alleged that Drive Planning promised to place investor funds into land development deals that generated 10% returns every three months. Funds were instead misappropriated by Burkhalter to buy a condo in Mexico, a yacht, and private jet trips, among other lavish items.
David Carmona, 41, of New York was sentenced to 10 years and 1 month in prison in connection with his $8.4 million cryptocurrency Ponzi scheme run through IcomTech. He promised investors they would double their investment in 6 months from investors in cryptocurrency trading and mining. Marco Ruiz Ochoa was sentenced to 5 years in prison earlier this year after pleading guilty to one count in connection with the scheme. Juan Arellano has also pleaded guilty and is awaiting sentencing.
Nayeem Choudhury, 28, of Texas, was sentenced to 5 years and 3 months in prison and ordered to pay more than $6.1 million in connection with a scheme he ran through Dream Venture Capital Group LLC while a resident of North Carolina. Choudhury promised monthly returns as high as 25% from trading and defrauded at least 88 victims. Choudhury lost over $5 million in investor funds and used other funds for extravagant purchases.
Lawrence Coven, 61, of New Jersey, pleaded guilty to charges that he ran a $1 million Ponzi-like scheme through Sunrise Enterprises LLC, which purported to provide financial services to investors. Coven represented he would invest his victims’ funds through Sunrise to provide short-term loans to borrowers, and he guaranteed returns of between 10% and 15%, representing that the investments were risk-free.
Michael B. DePetrillo, a former New Orleans-based attorney, was sued by the CFTC on allegations that DePetrillo and his companies, NOLA FX Capital Management LLC and Meteor LLC were operating a Ponzi scheme. The CFTC alleged that DePetrillo collected $7.6 million from 40 investors and promised returns from trading for foreign currency exchanges. He was criminally charged last month, and those charges included additional allegations that he collected a total of $9.2 million from over 50 investors for investment in gold futures in addition to foreign exchange.
Maria Dulce Pino Dickerson was arrested in connection with a scheme that she ran through Creative Legal Services that targeted the Filipino community. She is alleged to have defrauded more than 140 people who invested more than $10 million and lost more than $4 million.
Richardo Javier Guerra Farias and Francisco Javier Malave Hernandez, of Florida, consented to judgment with the SEC in connection with a scheme the SEC alleged was a $3.2 million Ponzi-like scheme that defrauded Venezuelan-Americans. They and their companies, Toller Stern Financial fka AEG Logistics and Toller Asset will pay $1.29 million. The scheme promised annual returns of up to 72%.
Karina Fernandez, Leonela Duarte, Bryan Guayara, Marco Rosas, and Erick Ruiz, of Florida, were sued by the SEC in connection with their roles in the MJ Capital Funding Ponzi scheme. The scheme was run by Johanna Garcia and defrauded investors out of $196 million, promising investors a 10% return per month. The scheme promised returns from purported short term, high interest loans to businesses.
Joseph Giuttari pleaded guilty to charges that he misappropriated more than $1.5 million in a Ponzi scheme run through Hybrid Capital Group, LLC, The Fens Co., LLC, and Realty Funding Advisors, LLC.
Jesse W. Harris, 36, was sentenced to 2½ years in connection with the scheme run through Harris Custom Projects LLC. Harris had previously pleaded guilty to securities fraud.
iCap Equity was found to have been operated as a Ponzi scheme by a bankruptcy court. iCap defrauded 1,800 real estate investors who invested $230 million into the firm. The scheme was formerly run by Chris Christensen, who previously disputed that iCap operated as a Ponzi scheme.
Luke M. Johnson, of Arizona, had his investment advisor license revoked and he had his company, Legend Capital Group, Inc., were ordered to pay over $229,000 in restitution in connection with an alleged Ponzi scheme run through GPB Capital. David Gentile was convicted in connection with the scheme earlier this year.
David Kagel, 86, of California, was sentenced to 5 years’ probation and ordered to pay almost $14 million after pleading guilty to running a $15 million cryptocurrency Ponzi scheme. The scheme guaranteed profits of 20% to 100% within 30 days. Kagel’s law license was revoked in 2023. His alleged co-conspirators, David Gilbert Saffron and Vincent Anthony Mazzotta Jr., pleaded not guilty. They promoted the investment scheme through Bitcoin Wealth Management, Cloud9 Capital, Circle Society, Omicron Trust, and Mind Capital.
Evan Frederick Light, 21, of Indiana, pleaded guilty to charges that he stole almost $38 million in cryptocurrency from almost 600 victims. Light stole customer personal identifiable information during a cyber-intrusion and then stole cryptocurrency worth over $37 million.
John Lopez, 73, was found guilty of charges relating to his operation of a Ponzi scheme that targeted victims in New Mexico. The scheme was run through Personal Money Management Co. and brought in approximately $19.4 million. Lopez represented that he had an advanced investment algorithm and that he had invested funds in stocks and bonds, but he actually bought $13.3 million worth of gold and silver.
Arsen Lusher, 49, was arrested on charges that he defrauded at least 20 victims out of approximately $5 million in an alleged Ponzi scheme. He represented that he had a profitable trucking business that had delivery and installation contracts with multiple large retailers. Investors were promised returns of between 30% and 40% over one or two years. Lusher raised more than $40 million.
Frank Mercado, 27, of North Carolina, was sentenced to 3 years and 5 months and ordered to pay over $709,000 in restitution in connection with a Ponzi-style scheme that defrauded over 100 people out of more than $700,000. He ran the scheme through Tiger-Wolf Capital and promised returns from options trading and similar investments.
Babu Ramaraj, 47, was sentenced to 7 years in prison and ordered to pay more than $15 million in restitution in connection with a Ponzi scheme run through DAB Inspection and Consulting Services, a small home contractor doing patio and deck projects. The scheme caused more than $15 million in losses from the $40 million that he took in.
Joseph Safranko aka Ted Safranko, David William Negus-Romvari, and their company, Traders Domain FX Ltd dba Traders Domain, were charged by the CFTC in a civil enforcement action, along with Ares Global Ltd. dba Trubluefx, a Saint Lucia company, Algo Capital LLC, Algo FX Capital LLC, Algo FX Capital Advisor LLC nka Quant5 Advisor LLC, Robert Collazo Jr., Juan Jose Herman aka JJ Herman, John Fortini, Stephen Likos, Michael Shannon Sims, Holton Buggs Jr., Centurion Capital Group Inc., Alejandro Santiestaban aka Alex Santi, Gabriel Beltran, and Archie Rice. The CFTC alleges that the defendants defrauded more than 2,000 customers who invested more than $283 million.
Lisa Schiff, of New York pleaded guilty to running a scheme that defrauded her clients out of $6.5 million. Schiff was a high-profile art advisor and abruptly shut down her business, SFA Advisory, last year when accused of running a Ponzi scheme. Schiff diverted client funds from the sale of the art or payments they made to purchase art and instead pocketed the money.
Ross Schlomann, 45, of Wisconsin, was sentenced to 5 years in prison and ordered to pay $2.1 million in restitution in connection with a scheme in the construction industry.
Juan Tacuri, 46, of Florida, was sentenced to 20 years in prison and ordered to pay more than $3.6 million in restitution in connection with the cryptocurrency Ponzi scheme known as Forcount and later as Weltsys. The scheme targeted Spanish speaking victims around the world and promised guaranteed returns on investments and the doubling of those investments withing 6 months. Victims were defrauded out of $8.4 million and were unable to withdraw money from their online portal accounts. Forcount continued to promote the fraudulent scheme by offering proprietary cryptotokens known as Mindexcoin. Tacuri had pleaded guilty earlier this year. Francisley Da Silva and Antonia Perez Hernandez were charged alongside Tacuri in 2022.
Dusan Varga and Pannon Investment Advisors LLC, of Florida, were charged by the SEC on allegations that they operated a $1.6 million Ponzi scheme that targeted the Serbian-American community. They scheme raised funds from at least 20 investors to invest in the Pannon Risk-Managed Income Fund.
INTERNATIONAL PONZI SCHEME NEWS
Austria
Five co-conspirators were sentenced in connection with a $16 million cryptocurrency and real estate Ponzi scheme. They received sentences of 5 years, 30 months and 21 months suspended. They used plastic bags to transport cash, hid money in shoeboxes and used crypto platforms, making it difficult to trace the money. The scheme defrauded 40,000 victims and is one of Austria’s largest fraud cases to date.
Czechia
Ondřej Janata is being prosecuted for an alleged Ponzi scheme that is believed to have harmed investors in the amount of 1.5 billion crowns. The scheme was run through Growing Way, which promised high returns from an alternative investment fund.
Nigeria
Favour Ekoh was arrested in connection with an alleged N700 million Ponzi scheme. Ekoh anchors a program on Urban Radio and is accused of luring investors into a Ponzi scheme. Investors were invited to invest into a scheme called Life Trading under Leverage Index Limited, where she promised 10% returns. The station’s managing director, Bamikole Owoyomi, was also arrested.
South Africa
Ben La Grange was sentenced to 10 years in prison in connection with a scheme run through Steinhoff International Holdings. La Grange pleaded guilty to charges of fraud involving $21 million.
Michael Haldane and Mauro Forlin were barred from the financial services section for 30 years due to their involvement in the BHI Trust Ponzi scheme. The BHI Trust scheme was orchestrated by Craig Warriner and involved approximately $166 million.
Kabelo Gwamanda, the former mayor of Johannesburg, was arrested on allegations that he was running a Ponzi scheme 10 years before he was involved in politics.
Louis Liebenberg and his wife, Desiree Liebenberg, were arrested along with Magdelena Petronella Kleynhans, Johannes Petrus Badenhorst, Helena Dorothea, Amy Schulenburg, Adriaan Dewald Strydom, Christelle Badenhorst, Nicolize van Heerden and Walter Niendinger in connection with an alleged Ponzi scheme. Liebenberg ran the scheme through Tariomix and Forever Zircon, purporting to buy and sell diamonds. Investors were promised high returns over a short time using a cashless platform called AE Switch.
Thailand
Pansuk Siriwipa, 30, was sentenced to 14 years in prison for operating a Ponzi scheme that defrauded almost 200 victims out of over $25 million. Her husband, Pi Jiapeng, engaged in this luxury good fraud which they ran through Tradenation and Tradeluxury.
