September 2017 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for September 2017. The reported stories reflect: 7 guilty pleas or convictions in pending cases; over 100 years plus one life sentence of newly imposed sentences for people involved in Ponzi schemes; at least 5 new Ponzi schemes worldwide; and an average age of approximately 58 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.

Nicholas Baratoff, 80, pleaded guilty and was sentenced to 5 years’ probation in connection with a Ponzi scheme in which he promised to invest money for others but instead used the money to fund his lavish lifestyle and to pay other clients with new funds.

Larry Bates, 73, was sentenced to 21 years and 10 months in prison and ordered to pay more than $21 million for operating a Ponzi scheme through First American Monetary Consultants that defrauded more than 400 victims. Bates told listeners of his Christian broadcast programs that they should buy gold and silver coins as financial protection from a supposedly imminent religious and economic collapse called “Mystery Babylon.” Investors paid $87 million into the scheme to buy precious metals, but Bates and his two sons, Chuck Bates and Robert Bates, and daughter-in-law, Kinsey Bates, kept the money for their personal use. Chuck and Robert were sentenced to more than 12 years and Kinsey received more than 5 years.

Brian R. Callahan, 47, was sentenced to 12 years in prison and ordered to pay almost $67.6 million in connection with a $118 million Ponzi scheme in which Callahan allegedly siphoned off $96 million. The scheme involved 40 investors whom he promised returns from investments in mutual funds, hedge funds and other securities. Instead, Callahan purchased Panoramic View, a struggling 117 unit beachfront resort and residence development that he owned with his brother-in-law and co-defendant Adam Manson.

Craig Carton, 48, was charged with running a Ponzi scheme involving the ticket-resale industry. Carton has hosted the WFAN radio show, Boomer and Carton in the Morning, with NFL quarterback Boomer Esiason since 2007, but Esiason is not accused of any wrongdoing. Michael Wright, 41, was also charged alongside Carton. Carton has also been sued for fraud by the SEC, which accused Carton and Joseph Meli, 43, of raising more than $5 million from investors claiming access to tickets for resale. Mark Varacchi has pleaded guilty to charges in connection with the scam. Carton allegedly used the money to repay a $2.5 million gambling debt. Carton resigned from the WFAN after his arrest for allegedly being part of a $5.6 million Ponzi scheme.

Bryan Coats and Jonathan Davey, 52, lost a partial summary judgment to the CFTC and a preliminary injunction was ordered against them in connection with a $40 million Ponzi scheme run through Black Diamond involving a currency trading platform which didn’t actually exist. Coats and Davey were previously sentenced to 21 years and 15 years, respectively, in connection with the scheme.

Nicholas Gelfman and his firm, Gelfman Blueprint Inc. (GBI) were sued by the CFTC and accused of running a $600,000 Bitcoin Ponzi scheme. The scheme promised 7% to 9% monthly increase in bitcoin from supposedly sponsoring a high-frequency bitcoin trading algorithm called “Jigsaw.” Gelfman allegedly tried to conceal the Ponzi scheme by claiming that the company had been hacked and that all customer funds had been stolen. The scheme took in $60,000 from 80 investors.

Robert Allen Helms and Janniece Kaelin were sentenced to 78 months in prison for a Ponzi scheme they ran through Vendetta Royal Properties. They had promised at least 80 investors that they would use their funds to acquire oil and gas royalty interests.

  

Michael S. Holcomb, 74, Gary L. Holcomb, 72, Jennifer L. Chalmers, and Kristen S. Van Breemen all pleaded guilty to charges that they operated a Ponzi scheme through their businesses, Berjac of Oregon and Berjac of Portland. Prosecutors alleged that the scheme defrauded more than 400 investors out of more than $40 million.

Jeremy R. Lundin, 30, was charged in connection with an alleged scheme run through his company, Big Island Capital. Lundin solicited more than $1 million from at least 51 investors and promised 67% to 97.8% returns through options trading. Lundin used the money to buy a Maserati and a boat and to pay off personal debts and take a trip to Paris. Lundin was previously booked for choking is wife and threatening to stab her with a broken lamp, and was convicted of assaulting a police officer after spitting on an officer’s arm during a traffic stop. Lundin pleaded guilty, acknowledging that he created phony account statements and provided investors online access to fictitious quarterly statements.

Hamlet Peralta, 38, was sentenced to 5 years in prison and ordered to pay $5 million in restitution in connection with a $12 million Ponzi scheme that he ran under the guise of a wholesale liquor business.

Stephen Peters and his company, VisionQuest Wealth Management, LLC, had their assets frozen in connection with allegations that Peters took millions of dollars from more than 70 investors. No charges have been filed, but a civil case that has been filed names Peters his companies and his wife, Amy Peters.

David Petersen lost his appeal of his conviction and 5 year sentence in connection with a Ponzi scheme run through Westover Energy Trading LLC and Ramco and Associates LLC. The Eleventh Circuit denied his appeal.  U.S. v. Petersen, 2017 U.S. App. LEXIS 17671 (Sept. 13, 2017).

Hasan Sarwar aka Alexander Sarwar dba Profit Management Int. and his spouse, Rachida Elfimi dba Profit Management, were charged by the CFTC with running an alleged $1.2 million Ponzi scheme through a futures commodity pool. The scheme allegedly defrauded more than 40 investors, promising them that they would double their money in less than 5 months.

Sen. Carlos Uresti, a Texas state senator under a fraud indictment, pleaded not guilty but acknowledged that the company FourWinds Logistics “might have been a Ponzi scheme.”

Leon Vaccarelli, 40, was charged with running an alleged Ponzi scheme. Vaccaerelli and his financial advisory firm, Lux Financial Services, allegedly defrauded at least nine victims in a scheme that lasted more than four years and took in more than $1 million.

James VanBlaricum, 78, was sentenced to 7 years in prison and ordered to pay $322 million in restitution in connection with a Ponzi scheme that he ran through Signal Oil and Gas Co. and Texas Energy Management. VanBlaricum previously pleaded guilty to defrauding investors into buying securities in his oil and gas companies.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

James Harvey Cameron, 66, was sentenced to 11 years in prison, ordered to pay $1.8 million in restitution and a $550,000 fine for tax evasion in connection with a $9 million Ponzi scheme that he ran through Venture Trading Inc. About 160 people invested in the scheme.

Benoit Senecal, 61, was sentenced to 2 years and 10 months in prison in connection with a Ponzi scheme that defrauded more than 200 investors out of $19 million. Sophie Jolicoeur, 48, and Jean-Mark Lavallee, 69, have also been charged in connection with the scheme.

Harold Backer, 54, is facing disciplinary proceedings over an alleged Ponzi scheme involving about $1,230,000 taken from at least 6 clients and 2 individuals. Backer disappeared in 2015 after failing to cooperate with an investigation into his conduct, but turned himself in about 18 months later.

Yian “Ethan” Sun and Yulan “Amy” Hu have been sued by both employees and investors in Istuary Innovation Labs Ltd. who allege that the tech company is running a Ponzi scheme. The company has 400 workers in North America and 1100 in China and has now closed its Vancouver office. The company was started in 2013 with the goal of linking high tech start-up companies in Canada with potential customers in China.

China

Ding Ning, the founder of Ezubao and chairman of its holding company Anhui Yucheng Holdings Group, was sentenced to life imprisonment in connection with the $7.6 billion Ponzi scheme that defrauded about 900,000 investors. Ding Dian, brother of Ding Ning, was also sentenced to life imprisonment, and 24 others received sentences ranging from 3 to 15 years. 

India

Kamalakanta Pattnaik, the founder of Sai Pragati Assets and Properties Pvt Ltd. was arrested in connection with an alleged Ponzi scheme.

Sanjit Bhowmik and Mithun Chatterjee were arrested in connection with alleged Ponzi schemes run through Sagarika Realtors Projects India Ltd. and Sagarika Mutual Benefits Funds Ltd.

Mugundhan Gangam, Sellathrurai Bhaskar, Chella Dhuri, Amal Raj, Ram Krishna Murthy and Kamal K Bakshi were charged in connection with an alleged Ponzi scheme run through Unipay 2U Marketing Pvt Ltd and Unigateway 2U Trading Pvt Ltd.

New Zealand

Hamish McIntosh, a defrauded investor in the scheme run by Ross Asset Management, is liable for interest on the $454,047 judgment against him to return fictitious profits received from the scheme. The High Court ruled that not only must the fictitious profits be returned, but McIntosh is liable for interest at 5%. The McIntosh case is a test case and the liquidators of Ross Asset Management intend to pursue other investors as well.

Shane Richard Scott, 60, pleaded guilty to running a $5.4 million Ponzi scheme that promised investors high returns from property developments and overseas investments. Scott told investors he was investing their money in brokering deals in Thailand, the diamond trade, South African trade deals, and a chicken farm in New Caledonia.

South Africa

Sandile Mantsoe, 27, has been accused of running a Ponzi scheme through his company, Trillion Dollar Legacy. At least 124 people claim that Mantsoe scammed them through his forex trading company. Mantsoe was previously arrested for the murder of his girlfriend, Karabo Mokoena.

Graeme Minne, 54, and his wife, Carolina Minne, 52, were sentenced 15 years and three year house arrest, respectively, for a Ponzi scheme that promised high returns of up to 65% from forex trading. The scheme took in about R278,786,853 from about 934 investors.

  

Thailand

Officials raided the house of Pudit Kittihradilok, the managing director of The System Plug and Play Company and Innovation Holding Company. The scheme is alleged to have defrauded over 5,000 investors.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The Eleventh Circuit affirmed a lower court order denying the motion of the United States to dismiss a complaint against it filed by a bankruptcy trustee seeking avoidance of the debtor’s federal tax payment.  The trustee alleges that the tax payments were fraudulent made by DBSI, Inc. Zazzali v. U.S. (In re DBSI, Inc.), 2017 U.S. App. LEXIS (9th Cir. Aug. 31, 2017).

Thema International Fund PLC, an Irish fund that sent investor money to Bernard Madoff, agreed to pay the trustee over the Madoff scheme $687 million to settle claims.

The receiver in the Arthur Nadel Ponzi scheme made an additional distribution of $5 million to about 400 victims who were defrauded in the scheme. This brought the investors’ total recovery to 52% of their losses. This was the seventh distribution, bringing the total to $68 million.

Ritchie Capital Management lost its request to terminate the receivership over the assets of Thomas Petters. U.S. v. Petters, 2017 U.S Dist. LEXIS 158769 (Sept. 27, 2017).

The liquidating trustee of Banyon 1030-32 LLC, one of the feeder funds in the Scott Rothstein $1.2 billion Ponzi scheme, filed a lawsuit against Harden & Associates, claiming that the insurance broker’s negligence caused the fund’s insurers to deny coverage. The firm had been hired to obtain $70 million in commercial crime insurance to protect the fund from theft by Rothstein.

Prosecutors withdrew a motion to shorten Scott Rothstein’s 50 year prison sentence, saying that he lied to the government and violated the terms of his plea deal. They had asked the judge to reduce Rothstein’s sentence because of his help in bringing down about 30 others in connection with the scheme. Rothstein intends to object to the prosecutors' decision.

Hunton & Williams LLP settled allegations that it aided Robert Allen Stanford in his $7 million Ponzi scheme. The settlement involves payment of $34 million that will go to benefit some of Stanford’s thousands of victims.

The receiver of the Stanford Financial Ponzi scheme was denied his post-verdict request to revive an $88 million fraudulent transfer claim against Gary Magness. The receiver, who believes that court gave improper jury instructions on the standard for a good faith defense, has vowed to appeal the ruling.

August 2017 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for August 2017.  The report stories reflect: 5 guilty pleas or convictions in pending cases; over 51 years of newly imposed sentences for people involved in Ponzi schemes; at least 14 new Ponzi schemes worldwide; 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. And please remember that I am just relaying what’s in the news, not writing or verifying it.

Connie Apostelos aka Connie Coleman, 51, was sentenced to 2½ years in prison for her role in the $70 million Ponzi scheme run along with her husband, William Apostelos. The scheme defrauded about 480 victims who lost about $20 million in the scheme. Connie Apostelos operated and oversaw multiple companies, including Coleman Capital Inc. and Silver Bridle Racing LLC. The scheme promised investors returns from stock, real estate, gold and silver, and loans to businesses.  William Apostelos previously plead guilty and was sentenced to 180 months in prison. Steven Scudder, 62, previously plead guilty to using his position as an attorney to facilitate the scheme. Scudder was previously sentenced to 14 months in prison.

Dawn J. Bennett, 55, was charged by the SEC with running a $20 million Ponzi scheme through her companies, DJB Holdings and DJBennett Holding LLC. The scheme involved selling notes issued by a luxury sports apparel firm to elderly and unsophisticated investors. Bennett promoted her standing as Barron’s-ranked top woman advisor and had a self-financed weekly radio show called Financial Myth Busting with Dawn Bennett. She also ran Bennett Group Financial Services. Bennett spent the money to support an extravagant lifestyle including purchases of jewelry, clothing, payments on a penthouse condo and a $500,000 annual 20-year lease for a suite at the Dallas Cowboys stadium. Bennett tried to cast spells on SEC investigators, including a “Beef Tongue Shut Up Hoodoo Spell.”

Louis Martin Blazer III agreed to pay $2 million and to be barred from the financial advisory business in connection with his activities run through Blazer Investment Advisors and Blazer Capital Management. Blazer agreed to settle the SEC charges but without admitting to the alleged Ponzi-like scheme. Blazer took money from professional athletes to fund movie projects: one titled Mafia: The Movie and another called Sibling.

Christopher Bohnenkamp, 42, who pleaded guilty to charges relating to a Ponzi scheme in April, was sentenced to 5 years and 3 months for his operation of a Ponzi scheme run through his companies, Treasure Valley Marine and Bohnencamp’s Whitewater Customs. His companies built boats and trailers, but victims lost $3.2 million in the scheme.

Michael S. Burnos, 72, was charged with fraud in connection with the sale or purchase of securities. He promised investors 20% returns from the purchase and sale of collectibles. Burnos had previously been sentenced to more than 7 years in prison for defrauding over 1,300 victims out of more than $14 million, telling investors that he was buying and reselling musical instruments for a profit.

Cardis International, a credit card company, is under investigation for allegedly running a Ponzi scheme that may have involved over $70 million. The scheme involved at least 31 investors who were promised returns of 12 to 18%. Cardis allegedly faked ties to Jay-Z’s company Roc Nation to lure investors.

Darren Dash was accused of running a Ponzi scheme that allegedly defrauded about two dozen athletes. Dash once headed Pro Player Funding, which is a subsidiary of Platinum Partners, also accused of running a $1 billion Ponzi scheme.

Timothy Durham, 55, the former CEO of National Lampoon Inc. was ordered to pay a $1.3 million penalty in connection with the SEC’s action against him, but the SEC’s request for $230 million in disgorgement was denied. Durham ran a Ponzi scheme through Fair Finance, defrauding about 5,000 investors. Durham was previously sentenced to 50 years in prison in connection with the scheme.

Robert H. Edmunds III, 75, pleaded guilty to charges relating to his solicitation of at least $1 million to invest in various Ponzi schemes such as Web Booth Inc., Branson City Limits, Inc., Douglas Network Enterprises, and Sunshine Real Estate Development Inc. Edmunds was under investigation in 2004 but remained at large, living in Belize for almost 12 years.

Tzvi Erez, 49, was sentenced to 8 years in prison in connection with a Ponzi scheme that defrauded 12 investors out of 6.2 million. Erez offered investors 30% interest per year from printing contracts that actually never existed. He showed investors bogus printing contracts to lure them into the scheme.

Daniel J. Flynn III, 53, had his plea agreement approved, which provides for Flynn to pay back more than $20 million to the 73 victims of his scheme. Flynn pleaded guilty to certain counts relating to his real estate investment scheme that prosecutors called “similar to a Ponzi scheme.”

Brianne Ghallagher, 32, is wanted in connection with an alleged Ponzi scheme that she ran while employed with Bromm’ Sod Farm. Ghallager, who ran the sod division, collected cash payments from customers but never turned the money over to her employer. Instead, she unlawfully used customers’ credit cards to pay on accounts of customers who previously paid in cash.

Rick Koerber, 44, started his trial for allegedly running one of the largest Ponzi schemes in Utah. He allegedly took in $100 million in a real estate scheme run through Founder’s Capital and FranklinSquires Cos. Investments. The funds were to be used for “equity milling” in real estate transactions – buying homes and renting or reselling them. Koerber has pleaded not guilty and has accused regulators and prosecutors of misconduct.

Thomas Lanzana and his company Blackbox Pulse (Unique Forex), and Nikolay Masanko and his company White Cloud Mountain, LLC were sued by the CFTC on allegations that they were running a $700,000 Ponzi scheme. They solicited investors to participate in forex trading pools and other investments. The scheme defrauded at least 31 investors.

Wayde McKelvy, 54, sought to dismiss a 10 count indictment on charges relating to his role in the $54.5 million Ponzi scheme through green energy company, Mantria Inc. Mantria was run by Troy Wragg and Amanda Knorr and promised investors returns of up to 484%. McKelvy pitched the scheme through get-rich-quick seminars promising to make investors “filthy, stinking rich.”

Raymond K. Montoya, 69, was charged with running a Ponzi scheme through RMA Strategic Opportunity Fund LLC. Montoya promised investors returns from investments in stocks and bonds, but only a portion of the money was actually invested. The rest was diverted for his personal expenses such as luxury vehicles and the mortgage on his son’s residence. Montoya told investors he had $5 billion in assets in his fund when the highest amount he ever had was about $20 million.

Jason Nissen, 44, pleaded not guilty to charges that he ran a Ponzi scheme through National Event Co., although it is believed that he is trying to work out a plea deal. The scheme involved $70 million invested in connection with a buy and resell ticket business. Nissen was also denied leave to travel to Las Vegas in advance of the Mayweather-McGregor fight.

Ariel Quiros, 59, consented to a preliminary injunction sought by the SEC who alleged that Quiros ran a “Ponzi-like” scheme to supposedly fund upgrades at the Vermont Jay Peak ski resort. A separate investigation is pending against Quiros and his partner, Bill Stenger, by the U.S. Attorney’s office, but no criminal charges have yet been filed.

Benjamin Rose, 35, was arrested on charges that he ran a Ponzi scheme that allegedly defrauded victims out of over $450,000. The scheme involved returns supposedly generated from the remodel and resale of properties that he purchased using investor funds.

Randall Rye, 26, was sentenced to 5 years and 10 months in prison in connection with a $1.7 million Ponzi scheme run through Faster Than Light Trading. Rye claimed to have a “propriety algorithmic trading program” for options and futures trading.

Martin Shkreli, 34, was found guilty on two counts of securities fraud and acquitted on 5 other charges relating to what prosecutors called a Ponzi scheme. Shkreli used investor funds to form a new drug company, Retrophin. Shkreli called the case against him “a witch hunt” and stated in a streaming video after the conviction, “I don’t think I’m going to prison, by the way.”

Douglas Swenson, 69, and his sons, Jeremy Swenson, 44, and David Swenson, 40, and Mark Ellison, 69, saw their criminal convictions upheld on appeal. The three were convicted in connection with a Ponzi scheme run through Diversified Business Services and Investment. Douglas Swenson was sentenced to 20 years in prison. Ellison was sentenced to 5 years and the younger Swensons were sentenced to three years each.

Richard Paul Underwood, 65, and Colin P. Purcell, 56, were arrested in connection with their roles in an alleged $15 million oil Ponzi scheme. The arrests came after the indictment was unsealed, which followed guilty pleas from David R. Greenlee, 41, and David A. Stewart, 46, who admitted their involvement in the investment scheme. The scheme involved the companies, Southern Energy Group Inc., Black Gold Resources, and TennStar Energy Inc. At least 150 investors were promised returns of 15% to 50% per year from supposed drilling opportunities. Underwood was also charged with securities fraud for allegedly running a boiler room of telemarketers in Florida to sell the fake oil investments.

Kevin D. Wanner reached a settlement with the North Dakota Securities Department in connection with the Ponzi scheme run through Questar Capital Corporation. Wanner was a securities agent doing business through Precision Financial and allegedly sold fictitious certificates of deposit and unregistered interests in pooled investments to 66 victims.

Paul David Ward, 61, was charged with running a Ponzi-style” scheme that took in $700,000. Ward operated an aviation fuel supply business through Lebanon Aviation Service Inc. and wrote promissory notes and post-dated checks as part of the scheme.

Chris Young Yoo, 44, was sentenced to 9 years in prison and ordered to pay nearly $3.7 million in restitution in connection with a Ponzi scheme that he ran through Summit Asset Strategies. The scheme defrauded 17 investors.

Joseph Paul Zada, 59, lost his appear to the Eleventh Circuit seeking to overturn his conviction and 210 month prison sentence. Zada was convicted in connection with a scheme that defrauded more than 20 investors. He represented that he had connections to Saudi Arabian oil ventures but instead used the funds for his personal expenses. On appeal, Zada said that he borrowed money from people in good faith and anticipated paying them from an expected inheritance of $250 million.

INTERNATIONAL PONZI SCHEME NEWS 

Argentina

The Ponzi scheme, PayDiamond, is alleged to have claimed 30,000 victims and involve $60 million. The scheme, which started in Brazil, is targeting Bolivian immigrants in Argentina.

Australia

Michael Christopher Samra, 57, pleaded guilty to charges that he ran a $2 million Ponzi scheme. He was sentenced to 8 years and nine months in prison.

Cayman Islands

CWM FX is under investigation for running an alleged Ponzi scheme.

Finland

OncCoin is under investigation as part of a global crackdown against the scheme. The scheme is under investigation in India, Italy, and the United Kingdom.

India

Pradeep Sethy, the Group Chief of Artha Tatwa, along with directors Manoj Patnaik and Sri Krushna Padhi, were sentenced to 7 years in prison in connection with a Ponzi scheme run through the Artha Tatwa Group.

Devi Prasad Moharana, the head of Bandhan Financial Services, was arrested on charges that hundreds of investors were defrauded in a Ponzi scheme. Moharana has pleaded innocence.

Michael Ferreira, 77, had his bail plea rejected, along with Malcom Desai, in connection with an alleged Ponzi scheme run through Vihaan Direct Selling (India), a subsidiary of the Hong-Kong based direct selling company, ONet.

Sudhir Patil has been held in connection with an alleged Ponzi scheme run through Jeeo India. Seventeen people have been arrested in connection with the scheme that promised investors 1% profit per day. Customers were asked to become members and buy the company’s e-currency.

The government was authorized to sell at auction properties of Land India Real Estate Private Ltd. and Land India Assets Ltd. The proceeds are to be paid to investors defrauded in scheme run by the companies.

Malaysia

Arunmaguam has been accused of running a Ponzi scheme through Uni Pay Group.

Datuk Seri and Pahang and Kota Baru were arrested on charges that they ran a Ponzi scheme through MGCfx. The scheme promised investors returns of 10% per week through foreign exchange trading.

Philippines

Barbara May Garcia, Herley Jesuitas, Anthony Kierulf, Jose Tengco III, Oudine Santos, Nicoline Mendoza and Maria Pamela Morris were ordered to be put on trial in connection with their role as agents or brokers for Philippine International Planning Center Corp.

July 2017 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for July 2017. The reported stories reflect at least 10 new Ponzi schemes worldwide: over 58 years of newly imposed sentences for people involved in Ponzi schemes; and an average age of approximately 49 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.

David Brian Binder, 61, was sentenced to 2 years and 6 months in prison for his role in helping Roberto Trinidad Del Carpio Frescas, 40, in running a $14 million Ponzi scheme. Del Carpio represented that he was a licensed investment broker and energy market expert. He ran the scheme through SMI International Institute LLC aka Stock Market Investment, Del Carpio Trading Institute LLC, and Del Carpio Holdings. Del Carpio was previously sentenced to more than 19 years in prison. Binder previously pleaded guilty to assisting Del Carpio in keeping proceeds away from creditors and lying to investors about protecting their investments.

Seth Adam Depiano, 36, was charged in connection with an alleged $20 million real estate Ponzi scheme that he ran through The Rental Group, U.S. Funding and Home Services LLC, and Draymond Homes. Depiano allegedly promised investors returns from investments generated from the renovation and resale of residential properties and rental income.

Joey Stanton Dodson, 52, was accused by the SEC of running an alleged $15.5 million Ponzi scheme through Citadel Energy Partners LLC. The scheme allegedly defrauded about 50 investors.

Mark Dulik, 31, was charged in connection with a $100,000 alleged scheme run through Rework, Inc. Rework claimed to provide cloud-based software services.

Stephen  S. Eubanks, 48, was sentenced to 2½ years in prison and was ordered to pay more than $437,000 in restitution in connection with a Ponzi scheme that he ran through Eubiquity Capital. He took in more than $700,000 from more than 20 investors, posing as a hedge fund manager.

Renwick Haddow aka Jonathan Black was charged in connection with an alleged fraud run through Bar Works and Bitcoin Store Inc. Haddow collected $37 million from over 200 Bar Work investors. Bar Works purportedly would rent or buy retail spaces, turn them into offices with a bar and sublet desks. The scheme solicited investments to fund expansion and promised guaranteed double digit returns. Haddow was also named in a lawsuit brought by 51 plaintiffs against Bar Works alleging $4.1 million in lost investments and $20 million in punitive damages. The investors allege that they were guaranteed annual return of 16% and a return of principal in 10 years. Another lawsuit filed by 71 investors against Haddow also names his wife, Zoya Kiselova aka Zoe Miller, alleging that she assisted Haddow in connection with the Bar Work entities. Haddow had been a fugitive since he was charged, but was apprehended in Morocco later in the month.

Michael S. Holcomb, 74, Gary L. Holcomb, 72, Jennifer L. Chalmers, 46, and Kristen S. Van Breemen, 44, had new charges issued against them in connection with an alleged $40 million Ponzi scheme they ran through Berjac of Oregon and Berjac of Portland. The scheme allegedly defrauded more than 400 investors through their insurance premium finance businesses. They were first indicted in 2015 but new charges of mail fraud were added. Michael Holcomb and Gary Holcomb, who are brothers, managed the entities, and Michael’s daughters, Chalmers and Van Breemen ultimately took over day to day operations at the businesses. In 1994, Peter R. Snook was convicted in connection with the operation of Berjac of Washington as a Ponzi scheme, and in 2013, Michael J. Turnock was convicted of operating Bridge Premium Financing, fka Berjac of Colorada, as a Ponzi scheme.

Cheryl L. Jones, 62, was sued by the SEC in connection with the Ponzi scheme run by her brother, Mark A. Jones. The scheme involved investments for a bridge loan program for Jamaican businesses. Jones was paid 10% commissions for soliciting investors into the Bridge Fund and was repaid her full investment, a higher rate of return than other investors and a monthly legal retainer. Other investors lost most of their money.  Mark Jones pleaded guilty earlier this year and is currently serving a 70 month prison sentence.

Shamika Luciano, 34, was sentenced to 5 years of probation for her role in the Ponzi scheme run by Nicholas Cosmo. Luciano was Cosmo’s executive assistance while Cosmo ran a $400,000 million Ponzi scheme that defrauded more than 5,000 investors.

  

Joseph Wayne McCool, 70, was indicted on charges that he defrauded investors out of $10 million. Two other individuals, Donald Manning, and Cameron Campbell, were indicted in 2006, but McCool has been missing since then. The three allegedly ran a scheme through Brixon Group Ltd. in which investors were promised 15% per month returns in connection with a high-yield insurance portfolio through a supposed European investment company. From their returns, 5% was to be put back into the scheme to buy insurance on the original investment.

Mark Moskowitz, 48, was sentenced to 33 months in prison in connection with a $675,000 Ponzi scheme that he ran through Edge Trading LLC and Edge Trading Partners L.P. Separately, Moskowitz had previously been ordered to pay a $1 million civil penalty for selling fraudulent securities and misusing investor funds. Moskowitz told investors that Edge Trading was invested in U.S. and foreign equities, futures contracts, and option contracts.

Jason Nissen and his brother, Robert Nissen, were enjoined from selling about 300 tickets for this year’s U.S. Open Tennis Championships. Their company, National Events Holdings LLC, got approval from the bankruptcy court to sell about 11,000 of remaining ticket stock, stating that the tickets would become worthless if not sold soon.

Carl Frederic Sealey, 42, and Eric Enge, 44, were indicted on charges that they were running a Ponzi scheme through Global Standard Industries and SEK Industries. They used their investment firms to allegedly defraud about 21 investors out of $1.6 million, promising 8.5% to 10% returns from investments in short-terms loans, operating expenses and real estate transactions.

Shirley Sooy, 66, began her 4 year, 2 month prison term for her $42 million Ponzi scheme. Sooy ran the scheme through a collection of companies known as TransVantage Group. The companies provided firms with audited freight bills generated by carriers and freight forwarders hired by those firms and was supposed to pay the carriers with funds provided by the firms.

Justin Troy Spearman, 29, was accused of selling royalty interests in oil and gas leases on land in Texas in what is alleged to be a Ponzi scheme. Spearman, who was recently released from prison after serving time on wire fraud charges, is being held in prison in lieu of bail.

Christopher Swartz, 46, was sentenced to 11½ years in prison in connection with a Ponzi scheme that defrauded investors out of more than $19 million. Swartz devised a promissory note scheme in which he defrauded investors through food and restaurant entities such as Jreck Subs, North Country Hospitality, Ultimate Franchise Systems, Caffino Live Roast, Madeline Ventures, Grace Ventures, and Obees.

Germaine Theodore, 37, was sentenced to 5 years in prison in connection with a Ponzi scheme that he ran through TGC Movement and Save My Future. The scheme promised customers “big reductions” in their monthly bills, up to 35%, and defrauded over 200 victims out of approximately $298,000. Theodore promised them the reductions if they paid 65% of the outstanding balance on those bills plus fees, and Theodore would supposedly pay the clients’ creditors.

Carol J. Wayland, 80, and her son John C. Mueller aka John Clark aka Bob Allison, 53, were sued by the SEC, along with their Wyoming entity, Kentucky-Tennessee 50 Wells/400 BBLPD Block LP, on allegations that they ran a $2.4 million Ponzi scheme that defrauded 41 investors. The complaint alleges that they raised the money by cold-calling investors from a California boiler room, using the fictitious name “Sahara Wealth Advisors.” Also named in the SEC complaint are defendants HP Operations LLC, C.A.R. Leasing LLC, Mitchell B. Dow aka Dave Baker, 54, Barry Liss, 59, and Steve G. Blasko aka Steve Gerald, 47.

INTERNATIONAL PONZI SCHEME NEWS

Australia

Michael Christopher Samra was accused of running a $2 million Ponzi scheme that defrauded at least 6 victims through his failing business, ALC Group Pty Ltd.

Bradley Keith Silber was charged by authorities with fraud in connection with a property development scheme run through Capital Growth International Club and All About Property Development. The scheme promised mostly elderly victims returns of up to 20%.

China

Members of Shan Xin Hui (Kindness Exchange), an investment firm, protested in Beijing, seeking the release of founder Zhang Tianming. Authorities say the investment scheme is a fraud, but some protesters say that Shan Xin Hui has benefited a lot of people in need. The scheme has recruited more than 4 million members in the past 12 months, promising returns of 30% and bonuses for those who introduce new investors. 67 people were detained in connection with the protest.

Chu Hoi-yan, 36, and her husband, Kevin Au Yeung, 39, were accused of defrauding 14 people in Hong Kong in an alleged Ponzi scheme involving luxury bags and watches which were to be sold at a profit.

England

David Dixon had two years added to his sentence when he failed to pay $353,000 pursuant to a confiscation order. The two year default sentence was added on to the original 3 year, 10 month sentence he is serving after pleading guilty to running an alleged no-risk gambling syndicate through Arboretum Sports (U.K.) Limited.

India

Ashok Kumar Patnaik was sentenced to 3½ years in prison in connection with a Ponzi scheme that he ran through six companies including: Micro Leasing and Funding, Micro Hotels, Micro Constructions, Micro Hospitals and Micro Media.

A charge sheet against OneCoin in India, a purported digital currency scheme, includes Bulgarian national Rjua Ignatova, the founder and CEO of OneCoin.

Charges were filed against Basudeb Bagchi and Avik Bagchi in connection with their role in the operations of Prayag Infotech Hi-Rise Limited and Prayag Infotech Network Private Limited. The total amount collected from investors is believed to be Rs 2,862.

Authorities conducted searches of five locations relating to an alleged Ponzi scheme called Uni Pay Group run by Kamal K. Bakshi and A K Singh. Bakshi was taken into custody in connection with the alleged scheme.

Philippines

Veronica Macpherson, 37, and her company, Macro Realty Developments Pte Ltd. are under investigation by authorities for running a suspected Ponzi scheme. The scheme promised investors up to 18% returns from investment in property developments and took in over $110 million. The scheme is being investigated in Australia, Singapore, and Malaysia as well. 

South Africa

Graeme Minne, 54, and Carolina Frederika Minne, 52, were convicted on fraud charges relating to a multi-million rand Ponzi scheme that defrauded over 930 victims. The scheme took in R278,786,853 and promised victims returns on forex trading of up to 65%.

Thailand

Chatchayont Pornbaiyok and Patthachak Theppasorn were accused of running a Ponzi scheme that defrauded about 700 people out of at least 100 million baht.

Vietnam

Ly Senleap, 31, and So Sothearoth, 30, were arrested in connection with an alleged Ponzi scheme run through FUGI Investment Excellence. The scheme allegedly promised investors a 9.8% monthly return on investments and defrauded about 150 victims. 

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The Eleventh circuit ruled that a group of federal employees who lost funds in the Ponzi scheme run by Wayne McLeod could not sue the government for having hired McLeod to give them financial advice. The court found that sovereign immunity applies because the claims were based on misrepresentations.

The Eighth Circuit declines to rehear argument on whether Ponzi scheme losses were covered by insurance. The court previously ruled that 3M’s insurers did not have to cover losses in connection with the WG Trading Co. LP Ponzi scheme.

The  CFTC sought default judgments against Cory Williams and his investment company, Williams Advisory Group LLC, seeking a civil monetary penalty of more than $9.7 million along with restitution.

June 2017 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for June 2017. The reported stories reflect: 4 guilty pleas or convictions in pending cases; over 44 years of newly imposed sentences for people involved in Ponzi schemes; at least 6 new Ponzi schemes worldwide; and an average age of approximately 57 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.

Rodney Allen, 65, is missing amid allegations that he was running a fraudulent scheme through his securities investment company, KA Investments Inc. Allen owes more than $1.1 million to investors. His accounts were frozen after his disappearance. Allen’s wife said that Allen took his passport, gun and cash from their safe.

William Apostelos, 55, was sentenced to 15 years in prison and ordered to pay restitution in excess of $32 million. Apostelos ran a $70 million Ponzi scheme through his firm, WMA Enterprises LLC, in which about 480 victims lost about $20 million.

Hugh Monroe Dyson, 67, was convicted of running a Ponzi scheme through his fictitious oil and gas drilling firm called Keyport Oil. He used scissors, tape and a copier to fabricate stock certificates for investors, who lost more than $289,000.

GAW Miners and ZenMiner, founded by Homero Joshua Garza, were ordered to pay $10.3 million in disgorgement and interest, plus a $1 million penalty, in an SEC action against them. Garza offered investors shares in a bitcoin mining operation and allegedly defrauded over 10,000 investors out of nearly $20 million.

Omar Hafez, 25, was sentenced to 46 months in prison and ordered to pay $1.5 million in restitution after pleading guilty to charges that he ran a Ponzi scheme through a number of entities, including Lotus Global. Hafez misrepresented that he had access to shares of companies before their high-profile initial public offerings. Over $1.5 million was invested in the scheme.

Stephen J. Hatch, 68, was sentenced to 5 years in prison for running a $70 million Ponzi scheme that defrauded 110 investors. The scheme involved investments in land in Arizona and Hatch preyed on Christian victims to invest in the real estate scheme. Hatch had previously pleaded guilty and one of the terms was that Hatch’s children, Stephen D. Hatch, Adam Hatch, Ryan Hatch, and Jessica Hatch, would not be charged.

Merl William Hickman Sr., 68, sought commutation of his 160 year prison sentence in connection with a scheme run through The Hickman Agency. His request was denied. About 160 investors lost more than $8 million. Investors were promised returns of 20% but no money was ever invested. Hickman’s son, Merl William “Billy” Hickman Jr., served a 5 year prison terms in connection with the scheme.

Patrick Kiley, 79, had his 20 year prison sentence upheld by an appellate court. Kiley sold investments in foreign currencies on the radio on his show “Follow the Money” which was broadcast on a Christian radio network. He defrauded more than 700 people nationwide in a $194 million Ponzi scheme.

Karen McClaflin, 58, pleaded guilty to charges alleging she was running a Ponzi scheme through her franchise of “We Buy Ugly Houses” which she named Trademark Properties and Trademark Reality. The business used investor money to supposedly purchase and renovate distressed houses, then reselling the houses at a profit. Trademark filed bankruptcy and McClaflin moved the investors to a new company called Homesource Partners which did the same fix and flip business model. She promised them 6% to 15% profits and offered them trust deeds to secure their position. 

Randy Miland, 63, was sentenced to 7 years and 6 months in prison and ordered to pay $214,000 in restitution for operating a Ponzi scheme that defrauded investors out of $500,000. Miland fraudulently solicited money from 10 investors, promising them to invest in futures and other investments. He had previously been convicted in another fraudulent scheme and sentenced to 55 months in prison.

Raymond K. Montoya was charged with running a $30 million Ponzi scheme through his companies, Research Magnate Advisors LLC and Resource Managed Assets LLC. He allegedly use investors’ money for his personal benefit and was able to raise funds by exaggerating the size of his investment funds and by inflating returns.

John Kevin Moore pleaded not guilty to charges relating to an alleged $2 million Ponzi scheme run through a mining company called Big Sky Mineral Resources and a fine art investment company called Glacier Gala.

Jason Nissen, 44, was accused of running a $70 million Ponzi scheme that he ran through his ticket company, National Event Co. found at NECO.com. Nissen deceived a private equity firm and a diamond wholesaler into loaning him money to buy tickets to the Super Bowl, “Hamilton,” Adele concerts, and the US Open. National Event Holdings LLC filed a Chapter 11 bankruptcy petition as a result of the alleged fraud conducted by Nissen. The company’s subsidiaries National Event Co. II LLC, National Event Co. III LLC, National Events Intermediate LLC and World Events Group LLC also filed their own Chapter 11 bankruptcy petitions.

Rodney Scott Phelps (no relation to the author) was indicted on charges that he ran a Ponzi scheme through Maverick Asset Management LLC along with Jason Castenir. The scheme involved an alleged oil and gas venture in Belize as well as a supposed investment in a casino.

David Phoenix has been accused by former clients of running a Ponzi scheme in a lawsuit filed in Los Angeles. Phoenix is an interior designer for many celebrities and has been accused of taking millions of dollars to buy goods but instead delivering cheaper goods or no goods at all.

Peter Ressler, 70, pleaded guilty to running a $3 million fraudulent scheme. Ressler is a former partner with Groob, Ressler & Mulgueen, which was one of Connecticut’s oldest bankruptcy firms. The scheme was equated to a Ponzi scheme in the plea agreement. Ressler took retainers from at least 30 clients that were earmarked for bankruptcy and tax matters, but instead used the money on personal and business expenses.

Timothy Sammons, 61, is facing extradition to the U.S. in connection with an alleged Ponzi scheme involving artwork. Sammons would acquire art from collectors, promise to find a buyer, and then sell or borrow against the artwork and use the money for himself.

Steven Scudder, 62, was sentenced to 14 months in prison for his role in the $70 million Ponzi scheme run by William Apostelos. Scudder served as trustee of the WMA Trust, a land trust that purported to secure investments made with Apostelos. Apostelos pleaded guilty and was sentenced to 25 years in prison for the scheme.

Gary Todd Smith, 47, pleaded guilty to charges relating to his role in a $64 million Ponzi scheme. The scheme was a complicated lending program in which old loans were repaid with new loans.

Jeffrey M. Stauffer, 69, lost his appeal in the Sixth Circuit regarding his conviction and 10 year prison sentence. Stauffer was convicted on charges relating to his $1.9 million foreign exchange Ponzi scheme.

Cecily Sturge, 69, was arrested on charges that she made material false charges to a federal agent regarding Scott Wolas’, her ex-husband’s whereabouts. Sturge allegedly passed off Wolas as her brother, named Cameron Sturge.  Wolas, 67, is a disbarred lawyer who is charged with operating a $1.5 million real estate investment scheme.

Cory Williams was the subject of an asset freeze requested by the CFTC for an alleged Ponzi scheme run through Williams Advisory Group LLC. The CFTC accused Williams of running a $13 million trading scheme that defrauded members of the Mormon Church.

Roger Williams was scheduled for trial in connection with an alleged Ponzi scheme in which about 100 investors lost about $2 million.

Michael Wright, 30, was accused of running a Ponzi scheme through a company called Wright Time Capital Group. The scheme took in more than $400,000 from investors and, although he represented that he invested those funds in foreign currency transactions, he used the funds to pay personal expenses and to make payments to earlier investors.

INTERNATIONAL PONZI SCHEME NEWS

Abu Dhabi

Officials arrested 54 people in connection with a luxury car scam that defrauded over 1,000 victims. The scheme involved the purchase of second-hand cars using post-dated checks. The cars would then be sold to the victims, but not delivered. The money would be used to pay back previous investors. Investors were initially promised 100% returns on their money, which was later revised to 70 – 80%.

Australia


Bill Vlahos faced charges that he defrauded more than $120 million from members of his punting club in a Ponzi scheme. It is alleged that Vlahos defrauded hundreds of investors through his scam betting syndicate, The Edge. 

Cambodia

Teng Saroeun and Teng Makara were arrested and questioned with respect to the operations of Investment Consultant Association and Empire Big Capital Limited. The companies are believed to be operating a Ponzi scheme, promising monthly returns of 10%. The scheme allegedly defrauded 7,000 people out of $60 million.

Canada

Jeremy James (Jay) Peers was sentenced to 3½ years in connection with a Ponzi scheme that he ran through Federal Mortgage Co. and the related management company, Peers Foster Kristiansen Inc. The companies went bankrupt, leaving $77 million in debt.

India

Sunil Panda, the director of Green India, was sentenced to 3 years in prison for his involvement in a Ponzi scheme.

Venkatachari Sampath, the head of Sastra Enterprises, Ltd. was sentenced to 4 years in prison. Sastra had collected 50 crore from investors, offering high returns, but did not return at least 3.3 crore.

Ashraf Khan was arrested after having jumped bail several years ago. Khan is accused of involvement in several Ponzi schemes from 2011.

Regulators began investigation of an alleged Ponzi scheme run through Webwork Trade Links, a cash-for-clicks scheme. The scheme allegedly involved about $772 million, with payouts in bitcoin.

New Zealand

We Grow Bitcoins was accused of running a fraudulent scheme. The scheme promised investors $148,300 monthly returns and required a NZ$30 million entry fee.

Paul Hibbs was charged with defrauding investors in a Ponzi scheme run through Hansa Limited and Cameron Gladstone Investments Limited.


Guy Edwards Sayers was accused of soliciting investors to invest in Arena Capital, trading as BlackfortFX, which is believed to be a Ponzi scheme. 

South Africa

Myles Ndlovu, 34, was arrested in connection with an alleged scheme run through Ponzi Scheme Profit Trading.

Uganda

Equity Bank, under the instruction of its parent Bank of Uganda, suspended an account belonging to Magara Smart Protus, the promoter of an online sports trading platform called D9 Club. The club promotes high returns from sports trading on a site called BetFair which places bets on different sports and offers “bonuses” every Monday for 52 weeks through bitcoins. BetFair was founded in Brazil last year by Danilo Santana and recruits in Uganda and Kenya.

Vietnam


The government issued a strong statement against OneCoin, an alleged Ponzi scheme. The government says that it did not license the company and the Vietnamese license it claims to have is a forgery. Norway and Belize are also investing this scheme.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The Second Circuit affirmed a decision that backed the decision of the trustee of the Bernard Madoff scheme to ignore inter-account transfers when calculating claims of customers.

The trustee over the Bernard Madoff investment firm case settled with the estates of Madoff’s two sons. The settlement of $23 million will leave the estates of each brother with $3.75 million combined.

The Eighth Circuit upheld a lower court ruling that the insurers of 3M Co. do not have to cover 3M’s losses in the Ponzi scheme of WG Trading. 

The receiver over JCS Enterprises which operated Virtual Concierge Machine filed a new round of fraudulent transfer lawsuits seeking to recover funds for the defrauded victims. The scheme defrauded about 1,800 victims out of $80.8 million. Investors believes they were purchasing more than 22,500 Virtual Concierge machines which they were told would be placed in hotels, casinos and sports venues. They were promised $300 a month from advertising on the machines. In reality, only 84 machines were ever produced.

A court approved a settlement of more than $4.2 million between the receiver of the Arthur Nadel $168 million Ponzi scheme and Wells Fargo Bank.

A court declined to dismiss a lawsuit against General Electric Capital Corp. for its alleged participation in the $3.6 billion Ponzi scheme run by Tom Petters. The court allowed a lawsuit by the trustee of Palm Beach Finance Partners LP to proceed against GECC, finding that the trustee had standing to bring the lawsuit and that the trustee of the Petters case did not have exclusive standing to bring the claim.

The Eighth Circuit upheld a lower court’s ruling denying 69 investor plaintiffs the ability to recover from St. Louis Bank in connection with the Martin Sigillito Ponzi scheme.

May 2017 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for May 2017. The reported stories reflect: 5 guilty pleas or convictions in pending cases; over 141 years of newly imposed sentences for people involved in Ponzi schemes; at least 8 new Ponzi schemes worldwide; and an average age of approximately 45 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed. And please remember that I am just relaying what’s in the news, not writing or verifying it.

Golan Barak, 49, pleaded guilty to one charge relating to a Ponzi-like scheme that he ran through Ergo Management. The real estate scheme involved mostly Israeli investors who were persuaded to invest funds to supposedly enter into a 50-50 partnership with Barak to buy real estate. Instead, Barak used the money to buy other properties or pay his expenses.

Larry Bates, and his sons, Chuck Bates and Robert Bates, and Kinsey Bates, were found guilty of running a Ponzi scheme through First American Monetary Consultants. More than 360 people lost more than $21 million in the scheme, which took in a total of $87 million for the purpose of buying precious metals. Larry Bates, a former Tennessee state representative, promoted the program through Christian television and radio programs and diverted more than $4 million to the creation of International Radio Network, a Christian radio system.

Richard Brandt, 62, was sentenced to 60 years in prison, with 20 years suspended, following his conviction for running a Ponzi scheme that took $1.9 million from 18 people. The scheme involved “house flipping,” and Brandt spent about $1.7 million on vacations and other expenses.

Thomas Bryant III (Trey) and his company, Bryant United Capital Funding, were accused by the SEC of running a Ponzi scheme. The SEC alleges that Bryant raised approximately $22.7 million from approximately 100 investors by promising risk-free, guaranteed returns of at least 30%. The complaint alleges that Bryant misappropriated $4.8 million for his expenses, he transferred $16.1 million to Wammel Group for securities trading, and he sent $1.37 million to concert promoter Carlos Goodspeed dba Top Agent Entertainment.

Alcibiades Cifuentes, 34, and his wife, Jennifer Wee Cifuentes, 36, were charged with running an alleged Ponzi scheme that defrauded about 20 people out of $500,000. The alleged scheme was run through the Cifuentes Fund Management hedge fund, and prosecutors say they used the money to buy themselves luxury items.

James Cochran, 61, appealed his 25 year prison sentence in connection with the Fair Finance Co. Ponzi scheme, blaming his sentence on ineffective lawyer. Cochran ran the scheme along with his partners, Timothy Durham and Rick Snow.

Daniel J. Flynn III, 54, was sentenced to 4 years in prison in connection with a $21 million Ponzi scheme that defrauded 90 victims. Flynn is an auctioneer who pleaded guilty to running a scheme that promised investors returns of 12% to 15%.

  

Paul Garceau Jr., 51, was charged on allegations that he was running a Ponzi scheme that defrauded elderly investors out of more than $800,000. Garceau ran the alleged scheme through Apex Wealth Management.

Franciso Illarramendi, 47, was ordered to pay about $26 million to the investors that he defrauded. Illarramendi is currently serving a 13 year sentence for the $700 million Ponzi scheme that he ran.

Mark Anderson Jones, 64, was sentenced to 70 months in prison for running a Ponzi scheme that defrauded 20 investors out of $10 million by promising them he was investing in Jamaican businesses.

Winstorn Ed Hoong Liang was sued by a group of foreign investors accusing him of playing a crucial role in the alleged $62 million Ponzi scheme run by North Dakota Developments LLC that sold interests in “man camps.” Liang allegedly tricked people into investing in four man camp projects that had serious flaws. The man camps were advertised as providing short-term housing for workers in Bakken oil fields of North Dakota and Montana.

Tamer Moumen, 39, pleaded guilty to running a $9 million Ponzi scheme. Moumen is a former hedge fund manager who mislead investors by misrepresenting that he consistently beat the S&P 500.

Yasuna J. Murakami, 44, was arrested on accusations that he was running a Ponzi-like scheme through investment advisory firms, MC2 Capital Management LLC and MC2 Canada Capital Management LLC. Murakami was the managing member of those entities that managed three hedge funds: MC2 Capital Partner Fund, MC2 Capital Value Fund, and MC2 Capital Canadian Opportunities Fund.

Hamlet Peralta, 37, pleaded guilty to charges in connection with an alleged $12 million Ponzi scheme that solicited funds for a supposed liquor wholesale business.

Antonio Reyes and Craig Kahler face civil charges in Colorado in connection with their role as sales people in the Ponzi scheme run by Kelly Schnorenberg. The scheme allegedly defrauded 225 investors out of $15.25 million.

  

Eminiano Reodica, 72, was sentenced to 10 years in prison and ordered to pay $29.7 million to his victims after pleading guilty, but then filed an appeal against his conviction and sentence. Reodica has run a $90 million fraud in the U.S. in 1988 but fled to Australia where he went by the name Roberto Coscolluela. He defrauded 27 victims in Australia and then attempted to fly to Canada when he was scheduled to appear in court. He California court proceedings dragged on for 5 years before he plead guilty.

William Schantz III, 63, and Verto Capital Management agreed to pay more than $4 million to settle charges brought by the SEC that they were running a Ponzi scheme. Schantz raised approximately $12.5 million from about 80 investors by selling promissory notes to supposedly fund Verto’s purchase and sale of life settlements.

David W. Schwarz, 60, the former chief financial officer of Cay Clubs Resorts and Marinas, was sentenced to 40 years in prison. The court found that Schwarz’s conduct resulted in $303 million in fraudulent proceeds and about $170 million in victim losses. The scheme promised returns of up to 20% based on promises to rent out condo units. About 1,400 people were victimized. Schwartz was also hit with a $303 million forfeiture order and money judgment.

Pradeep Singh, 60, was arrested on charges that he was running a Ponzi scheme. Singh is a former licensed insurance agent who promised 10% to 12% returns through his company, Pradeepsingh Corp. dba Secure Vision Associates Insurance Services.

Shirley Sooy, 66, was sentenced to 50 months in prison and ordered to pay $1.1 million in restitution in connection with a scheme she ran through a collection of companies known as TransVantage Group. The companies provided firms with audited freight bills generated by carriers and freight forwarders hired by those firms and was supposed to pay the carriers with funds provided by the firms. Instead Sooy used the funds to make mortgage payments for properties she owned in New Jersey and Florida, for a 48-foot yacht, a Maserati, credit card bills and to remodel her home.

Richard L. Thompson, 62, was sentenced to 4 years in prison in connection with a Ponzi scheme that he ran through Latten Management LLC. Investors bought shares in his real estate development company and would loan money to Thompson personally, believing that he owned more than 200 acres of land called Catawba Peak in Tennessee.

Carlos Uresti, 53, a Texas State Senator, was indicted in connection with an alleged Ponzi scheme run through a company called Four Winds Company. Gary Cain, 60, and Stanley Bates, 45, are also accused of running the Ponzi scheme with Uresti. Uresti claims that he is not guilty of any wrongdoing. The alleged scheme involved the sale of fracking sand for oil production. Four senior managers of Four Winds were also indicted and 3 have already pleaded guilty.

Sanderley Rodrigues de Vasconcelos agreed to pay more than $1.8 million to settle claims brought against him by the SEC in connection with the TelexFree Ponzi scheme.

Navin Shankar Subramaniam Xavier, aka Navin Xavier, aka “Dr. Navin Xavier,” 44, was sentenced to 15 years in prison in connection with a $33 million Ponzi scheme. Xavier solicited funds from about 100 investors who received promissory notes purportedly secured by an iron ore mine in Chile. The scheme was run through Essex Holdings, Inc. and involved supposed investments in sugar transportation and shipping, and iron mining.

Robert F. Wallace Jr. and Charles Cangelosi were charged in connection with an alleged Ponzi scheme run through Poker Entertainment Network LLC.

Cory D. Williams was accused by the CFTC of defrauding Mormon Church members out of $13 million in a trading scheme. Williams is the founder of Williams Advisory Group LLC and told at least 40 investors that he was trading futures contracts. Instead, Williams spent $1.3 million on himself, for meals, jewelry, vacations and charitable donations in his name.

Micah Christopher Wilson, 61, pleaded guilty to charges that he defrauded investors out of hundreds of thousands of dollars. Wilson worked in the insurance and securities industries but lost his licenses for both. He set up a real estate investment company, D&M Associates, LLC, with his brother, David Wilson.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Quintin Sponagle, 52, was ordered to pay victims $1.1 million. Sponagle pleaded guilty in December to charges that he defrauded 201 investors out of $1.1 million. The investors invested more than $4 million through Jabez Financial Services Inc., a company registered in Panama. He was sentenced to the 19 months prison that he already served.

Kenneth Charles Fowler, 67, was sentenced to 3 years for defrauding dozens of investors through The Investment Exchange. He raised $27 million to supposedly provide short-term loans but used the funds to support his personal lifestyle and pay dividends to some investors.

China

Authorities arrested 369 people believed to be involved in the Ponzi-like Nanning Investment Scheme. The scheme is code-named “Shen Jian” (god’s sword).

England

Peter Plimely, 68, was sentenced to 27 months in connection with a “Ponzi-style” scheme that defrauded victims out of almost £230,000.

Ghana

The Bank of Ghana issued a statement warning the public that a company called MMM Ghana is operating a Ponzi scheme through a virtual office.

India

Anjan Kumar Baliarsingh pleaded guilty to charges relating to a Ponzi scheme run through Capital Financial Services. He was sentenced to 3 years in prison. The scheme took Rs 15 crore from investors and promised them large returns. Others arrested in connection with the scheme are Ramachandra Hansda, Biju Janata Dal, Subarna Nayak, and Hitesh Bagarti,. 

Dipankar Ghosh, Malay Halder, Prasenjit Sil, and Malay Kumar Guha, officials of Real Tulip India Ltd., were sentenced to 3 years in prison. The Managing Director of Real Tulip, Tirtha Halder, was sentenced to 4 years.

Authorities filed charges against the Equinox Group and its four directors. Prasanta Chakraborty, purchased land, vehicles and valuable assets with the funds taken from over 100,000 people.

Police arrested Mansoor Siddiqui, who has been wanted for running a Ponzi scheme run through Admatrix Private Limited. The scheme allegedly defrauded more than one thousand people who lost up to Rs 20 crore in the scheme. The police had already arrested Ramniwas Pal, Ram Sumiran Pal and a few others in connection with the scheme.

Two directors of the Rightmax Technotrade International Ltd. Ponzi scheme were convicted and sentenced to 3 years in prison. Gunasekaran Murugan and Murugavel Nachimuthu were found guilty of misappropriating about Rs 17.6 crore from investors.

Two people were arrested in connection with an alleged Ponzi scheme run through Ablaze Info Solutions Limited. Pramod Kumar Solanki, 41, had set up a company called Solanki Enterprises, and Pramod Kumar Vimal, 45, had set up a company called Prizes Enterprises to solicit investors to invest in Ablaze.

Malaysia

A complaint was filed against Sean Tan, the chief operation officer of Empire Big Capital Limited, along with Huot Sovann, director of Asean Instrument Foundation, and Chi Gosaly, director of Investment Consultant Association. The lawsuit alleges that a Ponzi scheme stole about $46 million of their funds when they were promised 10% monthly profits and a return of their capital after 18 months.

Three people were arrested in connection with the JJ Poor to Rich (JJPTR) scheme.

New Zealand

The Supreme Court ruled that Investor Hamish McIntosh can keep the $500,000 he invested with Ross Asset Management, but must return the fictitious profits.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

A group of investors filed a lawsuit for $100 million against Fyre Media and its organizers, Jeffrey “Ja Rule” Atkins and Billy McFarland, alleging that Fyre Festival was a Ponzi scheme.

Investors in Thomas Kimmel’s investment scheme filed a lawsuit against First Baptist Church of Hammond Inc., alleging that the church facilitated a $5 million Ponzi scheme by hiring Kimmel to provide church members financial advice. The investors say they would not have invested with Kimmel without the church’s endorsement of him. Kimmel encouraged members to invest in Sure Line Acceptance Corp., which operated a car lot and financed car loans. The church’s former pastor, Jack Schaap, who is now serving a 12 year prison sentence for having sex with an underage church member, received a 1% kickback for each investment. Kimmel was sentenced to 22 years in prison in 2014.

The Second Circuit affirmed a bankruptcy court opinion agreeing to undo the sale of a $230 million claim by the liquidator of the Fairfield Sentry Ltd. feeder fund in the Bernard L. Madoff scheme. The liquidator sold the claim to a hedge fund, Baupost Group LLC, just days before the value of the claim skyrocketed due to a settlement that brought in billions of dollars for the Madoff estate.

The Justice Department disclosed the amount that it has paid to the Madoff Victim Fund administrator who has been engaged to distribute $4 billion to victims of the Bernard Madoff scheme. The administrator has been paid $38.8 million, although no distribution has yet been made. This distribution scheme is distinct from the SIPA proceeding in which the trustee has paid out more than $9 billion to date to “customers” as defined by the SIPA statute.

LTV Inc., doing business as Sterling Escrow, reached a settlement and agreed to pay $800,000 to a class of Japanese investors who accused the firm of participating in the Ponzi scheme run through MRI International Inc. and its principal, Edwin Y. Fujinaga. The scheme involved more than 8,700 investors, who argued that the escrow agent should have known about the alleged scheme because of the bookkeeping and account services it provided to MRI.

A class action was filed against PayPal on behalf of about 162,000 investors in a $207 million Ponzi scheme known as Traffic Monsoon. The scheme was founded by Charles David Scoville. The complaint, seeking at least $5 million in damages, alleges that “PayPal was aware that Traffic Monsoon was making Ponzi/pyramid scheme payments to investors and that Traffic Monsoon’s Ponzi/pyramid scheme was growing exponentially in classic Ponzi/pyramid scheme fashion.” Additionally, the complaint states, “PayPal provided substantial assistance to the Traffic Monsoon scheme by allowing Traffic Monsoon to use its services in an extraordinary and atypical manner.”

The Fifth Circuit upheld the dismissal of the receiver’s fraudulent transfer lawsuit against Dillon Gage Inc. in the R. Allen Stanford Ponzi scheme case. The receiver said to recover $5 million paid by Stanford Coin & Bullion to Dillon Gage