April 2019 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for April 2019. The reported stories reflect at least 7 new Ponzi schemes worldwide; at least 4 guilty pleas, over 53 years of newly imposed sentences for people involved in Ponzi schemes; and an average age of approximately 46 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Jason E. Adkins, 40, of Ohio, pleaded guilty to charges that he orchestrated a $50 million Ponzi scheme that defrauded at least 46 investors. Adkins promised returns of 15% to 20% from a supposed business that would buy over-sized tires commonly known as off-the-road-tires, that would then be re-sold to a buyer at a much higher price. He ran the scheme through his two companies, Landash Corp. and Midwest Coal LLC.

Mark Alan Blankespoor, 49, of Iowa, was charged in connection with an alleged $15 million Ponzi scheme. The scheme allegedly defrauded at least 150 investors by promising 40% returns in the development of “medically oriented gyms.” Blankenspoor is the owner of Blankenspoor Consulting of Pella. His lawyer states that Blankespoor is a “respected physical therapist and certified health coach.” Blankespoor has pleaded not guilty to the charges.

Monique Brady, 44, was charged on accusations that she ran a $4.4 million Ponzi-like investment scheme that involved foreclosed properties. Brady defrauded 32 investors who invested $10 million based on misrepresentations that she was overseeing major renovations at the properties which would generate profits. Brady owned MNB LLC, which did maintenance and upkeep for the home-loan providers on the foreclosed properties.

Angel Bronsgeest, 55, of California, was sentenced to 33 months in prison, 3 years under supervised release and was ordered to pay $2.5 million in restitution for her role in a Ponzi scheme that defrauded about 60 victims. The scheme was orchestrated by Shawn P. Watkins, 49, who conducted monthly real estate seminars to solicit investments into his company, The Equity Growth Group. Investors were promised returns from the supposed acquisition and repair of properties and bridge loans.

Antonio Carlos De Godoy Buzaneli, 57, was sentenced to 20 years in prison for his role in a $150 million investment fraud scheme that defrauded investors in Minnesota. He pleaded guilty last year, and one of his co-conspirators, Jose Manuel Ordonez Jr., was sentenced to 10 years earlier this year.

Anthony Norman Carta, 57, of Michigan, was accused of running a $300,000 Ponzi-type scheme. He is the owner and operator of Freedom by Faith Ministries and defrauded about 100 people, promising them assistance with short sales, mortgage modifications and other real estate transactions. Carta pleaded no contest.

Craig Carton was sentenced to 3½ years in prison for his role in a fake ticket Ponzi scheme. Carton pleaded for leniency, blaming his actions on “demons” stemming from abuse as a child and a gambling addiction. Michael Wright, 42, of New Jersey, was sentenced to 21 months in prison last month in connection with the ticket selling scheme. Carton raised $2 million from a hedge fund, Brigade Capital, to be invested in tickets, but Wright, a financial manager for the business, diverted funds to pay down his home equity line and to pay Carton’s gambling debts.

Michael J. DaCorta, Joseph S. Anile, II, Raymond P. Montie, III, Francisco "Frank" L. Duran, and John J. Haas, along with Oasis International Group, Limited in Florida, were charged by the CFTC. They were accused of misappropriating more than $47 million from investors in two commodities pools – Oasis Global FX, Limited and Oasis Global FX, SA – that were to trade in retail foreign exchange. The CFTC alleged that they were running a $75 million scheme that resembled the Black Diamond forex scheme from a decade ago. The scheme defrauded 700 investors and the funds were misappropriated or lost in forex trading.

Michael D’Alessio, 53, of New York, was sentenced to 6 years for his role in a $58 million Ponzi scheme. D’Alessio pleaded guilty last year to running the scheme through his real estate development company, Michael Paul Enterprises.

Christopher Dean Dougherty, 46, of California, was arrested on allegations that he ran an investment scheme that defrauded about 50 investors out of $7 million. Dougherty represented that the funds were invested in local businesses, including a 100-acre cattle ranch. Dougherty filed for bankruptcy earlier this month. The SEC also charged Dougherty, alleging that he and his firm, C&D Professionals, defrauded clients who were mostly district employees, hospital employees, veterans and neighbors.

Khemraj Dave Hardat, 50, pleaded guilty to charges that he ran a $5 million Ponzi scheme. Hardat posed as a beverage entrepreneur and misrepresented to at least one investor that Steph Curry would be endorsing one of the beverage products. The scheme defrauded at least 7 victims out of $5 million.

Thomas Huling, of Rhode Island, was indicted on charges relating to an alleged $14 million Ponzi scheme in which Huling posed as an investment manager. Over a 10-year period, Huling allegedly moved money between 50 different bank accounts under 8 names. Huling used several different schemes, including a supposed investment in technology to reduce car admissions, and another with a new internet advertising platform.

Cameron Jezierski, 28, of Texas, pleaded guilty to charges relating to his role in a $360 million Ponzi scheme that defrauded more than 400 investors. The scheme was run by Kevin Merrill, 53, and Jay Ledford, 55. Jezierski assisted by submitting false information on financial statements and setting up fake companies. Jezierski was the COO of Riverwalk Financial Group where he worked under Ledford.

Amanda Knorr, 35, was sentenced to 30 months in prison and ordered to pay $54 million in restitution for her role in the $54 million Ponzi scheme run by Mantria Corp. Knorr co-founded Mantria with Troy Wragg and they raised funds from hundreds of investors to produce a supposed clean energy product called “biochar.”

Thomas Lanzana and his company Blackbox Pulse (Unique Forex), and Nikolay Masanko and his company White Cloud Mountain, were ordered to pay $2.7 million for operating a Ponzi scheme that defrauded more than $700,000 from investors. The scheme involved the fraudulent solicitation of funds into foreign exchange trading pools and other investors. The CFTC had charged the operators in 2017 in connection with the fraud.

Brian Oliver pleaded guilty to charges relating to a $617 million fraud run through Aequitas Capital Management.  The SEC sued the company and the top three executives, Oliver, Robert Jesenik, and N. Scott Gillis, in 2016, alleging that they were running a Ponzi-like scheme.

Brent Thomas Sapp, 38, of Virginia, was sentenced to 9 years in prison in connection with a $9 million Ponzi scheme that caused $1.8 million in losses. The scheme was run through Sapp’s company, Novus Properties, which claimed to buy and resell distressed lender-owned properties in D.C., Virginia and Maryland. Sapp never actually closed on a single deal but instead spend the investor funds on golf trips, wealth-building seminars, and a Mercedes.

Robert Shapiro, 61, was arrested on charges that he ran a $1.3 billion Ponzi scheme through Woodbridge Group of Companies LLC. Dane R. Roseman, 35, and Ivan Acevedo, 42, were also arrested and pleaded not guilty. The real estate scheme allegedly defrauded about 10,000 investors by promising them returns in low risk real estate investments.

Junzo Suziki, 70, and his son Paul Suzuki, 40, were extradited to the U.S. from Japan in connection with a fraud run through MRI International, Inc., a Nevada investment company. Co-defendant Edwin Fujinaga, 72, was found guilty in November 2018 in connection with the Ponzi scheme that allegedly owed investors over $1.5 billion.

Eliyahu Weinstein and his company, Pine Projects, were ordered to pay victims $87 million in connection with his Ponzi scheme. Weinstein was sentenced to 264 months in prison in 2014 in connection with a real estate Ponzi scheme that caused $200 million in losses.

Kent Whitney and David Lee Parrish were charged in connection with an alleged Ponzi scheme that defrauded 442 victims in the Vietnamese community out of about $25 million. Whitney and Parrish were pastors who ran The Church for the Healthy Self, supposedly with a mission to promote opportunities for those in need. The SEC has alleged that they promised investors returns of up to 43% guaranteed, but used the money to fund their lavish lifestyles rather than for purposes of legitimate investments.

INTERNATIONAL PONZI SCHEME NEWS

Canada

A class action was certified against Virginia Tan, her husband, Patrick Tan, and her son, Marcus Tan, in connection with a $30 million Ponzi scheme. Tan previously admitted to running a fraudulent scheme. She defrauded 240 investors, promising them returns of 16% and 21%, and ran the money through 6 companies, including Letan Investments Management and Letan 88 Enterprises Inc.

Dubai

Canadian Aziz ‘Com’ Mirza has been accused of running a string of Ponzi schemes targeting Muslims. The majority of the victims belong to a UK-based online community platform called the Muslim Entrepreneur Network (MEN). Mirza allegedly ran the scheme with his brother, Rafaqat “Rocky” Mirza.

Germany

Officials are investigating Dexcar, a car rental company that allegedly ran a Ponzi scheme in Europe. The allegations are that Dexcar cheated several tens of thousands of customers, promising customers they would drive a new car for 24 months for a relatively small down payment. Of 40,000 cars ordered, officials allege that only 500 have been delivered. Dexcar founder and manager, Mario Gai, has denied the allegations.

India

Nicholas Koonis, 38, and Kaloso Cantigioni, 40, were accused of running a Ponzi scheme through Drego Consultants Pvt. Ltd. They allegedly ran several schemes using the name Global Inter Gold (GIG) and promised investors profits. Using a YouTube channel and other social media, they represented the company was a leader in financial security.

Mapple Innovative Promoters (MP) Private Limited was accused of running a Ponzi scheme involving bike taxis. The company offered investors five different plans promising monthly returns and had 12,000 investors. Written complaints were filed against the company’s managing directors, Rajesh Khantwal and Kapil Dhama, director Nitin Tyagi, CEO Sachin Raghuvanshi and managers Shubham Chaudhary, Sandeep Yadav, Pramod Kushwaha and Ajay Pandey.

Kuwait

Abdulaziz Houhou was sentenced to 10 years in prison in connection with a $240 million international Ponzi scheme. The scheme involved real estate deals in New York and other major U.S. cities. Houhou and his companies, including BinHouHou Enterprises HMG Group, bought or brokered houses in struggling neighborhoods. As many as 2,000 investors were promised 15% returns and were defrauded.

Nigeria

Babagana Dalori was arrested in connection with an alleged Ponzi scheme that defrauded 27,400 Nigerians. Dalori was the Chief Executive Officer of Galaxy Transportation and Construction Services Limited which defrauded investors out of N7 billion. The scheme initially promised investors 200% returns which were later reduced to 135%.

Samoa

Samoa’s Central Bank named the Samoa Worship Centre as one of two churches who may be involved in the OneCoin cryptocurrency scheme. Transactions relating to OneCoin had been banned last year due to security concerns, but OneCoin got around the restriction by moving at least $2.3 million through New Zealand-based Samoan churches.

South Korea

Officials arrested suspects known as Lee and Bae in connection with an alleged Ponzi scheme involving the sale of private digital tokens called M-Coins. The scheme involved $18.7 million and defrauded about 56,000 people. The scheme promised that the fake cryptocurrency could lead to profits of about 600%.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The trustee of Palm Beach Finance Partners L.P. and Palm Beach Finance II L.P. negotiated a $49 million settlement with General Electric Capital Corp. in connection with the Tom Petters Ponzi scheme. The Petters scheme involved fictitious wholesale to retail transactions. The trustee alleged that GE Capital discovered the scheme in 2000 but didn’t tell anyone.

Investors sued Wells Fargo bank, alleging that the bank knew of a real estate investment fraud run through a firm called EquityBuild. EquityBuild was run by Jerome Cohen, 63, and his son Shaun Cohen, and raised at least $135 million from more than 900 investors. The lawsuit claims that Wells Fargo aided the fraud by “financing the interest payments interest payments owed to other investors with new investors’ money, rather than with the income from real estate properties that were supposed to support those returns. Wells Fargo had actual knowledge that it held fiduciary funds in its accounts … and knew that those funds were actively being misused.”

The Fifth Circuit affirmed a lower court decision barring a lawsuit against Greenberg Traurig in connection with the R. Allen Stanford Ponzi scheme. The court found that the doctrine of attorney immunity barred the lawsuit. Troice v. Greenberg, 2019 U.S. App. LEXIS 11230 (5th Cir. Apr. 17, 2019).

March 2019 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for March 2019. The reported stories reflect at least 8 new Ponzi schemes worldwide; at least 6 guilty pleas, about 50 years of newly imposed sentences for people involved in Ponzi schemes; 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.

Richard K. Booy, 50, was sentenced to 5 years in prison for defrauding at least 15 clients out of more than $1.4 million. The scheme was run through Principal Financial Strategies LLC and Safe Financial Strategies Inc. Booy promised no-risk investments and guaranteed returns. Most of Booy’s victims were elderly, and Booy diverted the invested funds to cover his personal expenses and to make payments to earlier investors.

George Bussanich Sr., 60, George Bussanich Jr., 39, and Wilma Bussanich, 58, pleaded guilty to charges that they ran a $7 million fraudulent scheme.  First, they sold 26 investors unregistered investments in a fictitious surgery center called Metropolitan Ambulatory Surgical Center, LLC.  When they were caught and agreed to settle, they then convinced 18 of the 26 investors to invest another $3 million in a phony company called Global Fund Management. Others involved in the scams are Heidi Francavilla, 60, Robert Schooley, 67, Christopher Hanna, 37, and attorney Bryan Nazor, 47.

Danny Butler, 70, of Kentucky, was sentenced to 8 years in prison and ordered to pay almost $1.3 million in restitution in connection with an alleged Ponzi scheme. Butler, an attorney, used his position to steal funds from his estate and general civil law practice clients. Butler incurred gambling losses of about $1.5 million during this same period.

Jeffrey Carpoff and Paulette Carpoff had their assets forfeited by authorities in connection with an alleged scheme that they were running through DC Solar. The scheme involved mobile solar generators, and the individuals running the company are accused of diverting most of the investment dollars to fund their personal expenses, including vacation homes, $19 million worth of private jet trips, 90 cars and tickets for a $782,000 luxury box at the Las Vegas Raiders stadium-to-be. DC Solar has filed for bankruptcy.

Amrit Jaswant Singh Chahal, 31, of Virginia, was sentenced to 2½ years in prison in connection with a $1.3 million investment scheme that he ran through his company, Kane Capital LLC. Chahal promised investors returns of 28% to 34% annually, falsely reported Kane Capital’s earnings, falsified brokerage statement, and diverted investor funds for his own personal use. Chalal promised returns from investments in the purchasing, trading, or otherwise investing in commodities for future delivery and other financial instruments.

Carl Chen, of Delaware, pleaded guilty to charges that he ran a Ponzi scheme through his company, Chenmax Properties, Inc., a Delaware Real Estate Investment Trust, promising to invest his clients’ funds in real estate with 10% to 15% annual returns. About $3.32 million was invested in the scheme.

Randall Crater, 48, was arrested on fraud charges relating to his cryptocurrency company, My Big Coin. About 28 investors paid in about $6 million. Crater claimed that his cryptocurrency would be backed by $300 million in gold reserves, but there were never any gold coins or gold assets. The CFTC charged the company with fraud in 2018.

  

Christopher Dougherty, of California, was accused of running a $6 million Ponzi scheme. Dougherty was a financial investment advisor and would recommend to clients that they take money out of investment accounts and place the funds in private placement accounts. Clients started seeing red flag warnings signs of problems, such as bounced checks.

William Neil “Doc” Gallagher, 78, of Texas, a religious radio host and financial adviser, was indicted on charges that he stole at least $19.6 million from about 60 senior citizens. The alleged scheme was run through Gallagher Financial Group, Inc., and W. Neil Gallagher, Ph.D. Agency Inc. Gallagher, who marketed himself as “The Money Doctor,” falsely claimed to be a licensed investment adviser and promised guaranteed, risk-free returns of 5% to 8% from investments in Diversified Growth and Income Strategy Account. The SEC also charged Gallagher and his companies with securities violations.

Cameron J. Hager, 43, of Missouri, was sentenced to 8 years in prison and ordered to pay about $3.2 million in restitution in connection with a cattle Ponzi scheme run through 5A Holdings LLC. The scheme defrauded 92 investors by promising them returns ranging from 23% to 28% from investing in a cattle fund. Investors gave money to Hager to purchase herds of cattle that Hager said he could sell for a substantial profit. Hager used the money on personal expenses and to buy cars and trailers and to make his mortgage payments.

Konstantin Ignatova, 38, was arrested on charges relating to OneCoin, Ltd., an alleged cryptocurrency Ponzi scheme founded alongside his sister, Ruja Ignatova, 33, and others. Ruja remains at large. It is reported that between 2014 to 2016, OneCoin took in approximately $4 billion in sales revenue, and claimed profits of approximately $2.5 billion. OneCoin claims to have 3 million members worldwide. Mark S. Scott, 50, is alleged to be a party to the money laundering operation, helping the company to launder more than $400 million through accounts in the Cayman Islands and the Republic of Ireland. He was arrested in September.

Scott Kohn, 64, of California, was indicted in connection with an alleged $300 million Ponzi scheme targeting pension holders. The scheme was run through Kohn’s company, Future Income Payments, which collected monthly payments from pensioners “in exchange for a lump sum payment or loan.”  Many of the 2,600 victims were veterans, and they were promised returns of between 6.5% and 8%. Kohn had pleaded guilty in 2006 to separate felony charges relating to trafficking in counterfeit goods.

Daniel Todd Levine, of Colorado, was banned by FINRA from working in the securities industry. Levine had been serving as a Bitcoin broker, working alongside his brother who is a long-time U.S. fugitive residing in Europe. The alleged scheme brought in about $2 million. Levine consented to sanctions without admitting or denying his guilt.

William B. McHenry, 71, pleaded not guilty to charges relating to his involvement in the scheme run by Arthur Lamar Adams, who previously pleaded guilty and is serving a 17-year sentence. McHenry is alleged to be a salesperson in the scheme who sold bogus timber rights for Madison Timber Properties. McHenry allegedly sold more than $18 million in investments to more than 25 people and operated a company called First South Investments. The Madison Timber scheme involved $85 million and defrauded more than 250 investors.

Raymond Montoya, 70, of Boston, was sentenced to 14 years in prison for running a Ponzi scheme through a pooled hedge fund called RMA Strategic Opportunity Fund LLC. Montoya was a hedge fund manager who defrauded friends, family, and other investors out of millions of dollars. Montoya defrauded investors out of $38 million, telling them he was investing in stocks and bonds. Montoya used most of the money to purchase a Lamborghini, Rolls Royce, a few Ferraris, and a few Porsches, to pay his children’s student loans, and to pay his home mortgage.

Patrick O’Connor, 61, of Wisconsin, agreed to plead guilty to charges that he was running a scheme through Madison Financial Services LLC. O’Connor took in about $12.5 million from investors who thought he was investing in securities. Instead, he spent the funds on real estate, personal expenses, and dividends to other investors.

Carol Ann Pedersen, 66, pleaded guilty to charges in connection with an alleged $40 million Ponzi scheme that defrauded investors out of about $27 million. Pederson, a certified public accountant, defrauded more than 50 people by persuaded them to invest with her even though she was not a licensed investment advisor. She solicited her accounting clients’ investments through two types of investment opportunities that she offered: “Time Deposit” and “Client Pool.” The victims were told that Time Deposit would invest in low-risk securities providing a fixed return on their money after a period of time while Client Pool would invest their money in the stock market through an investment pool Pedersen had established with other investors’ funds.

Leon Vaccarelli, 42, of Connecticut, was charged in connection with a scheme that involved more than $1 million. Vaccarelli was a financial advisor who told his clients that he was investing their money, but he instead used the funds for his personal and business expenses.

Kent R.E. Whitney, 37, and Pastor David Lee Parrish, 47, of California, were the subject of charges brought by the SEC against them and their purported church, The Church for the Healthy Self (CHS) in connection with an alleged $25 million Ponzi scheme. The scheme was also run through CHS Asset Management Inc., a Texas corporation. The church’s website appears to be a “virtual church” but the primary mission of the church appears to be obtaining investors funds, according to the SEC. Whitney formed The Church for the Healthy Self in 2014, three months after being released from prison for defrauding investors in a $600,000 commodity options investment scheme that he ran with Parrish. The SEC alleges that the guaranteed profits promised to investors were as high as 43% and that Whitney and Parrish stole millions of dollars.

Michael Wright, 42, of New Jersey, was sentenced to 21 months in prison in connection with the ticket selling scheme run in which Craig Carton was involved. Carton raised $2 million from a hedge fund, Brigade Capital, to be invested in tickets, but Wright, a financial manager for the business, diverted funds to pay down his home equity line and to pay Carton’s gambling debts.

INTERNATIONAL PONZI SCHEME NEWS 

Canada

Kenneth Salomon and his law firm, Sternthal, Katzenelson Montigny, LLP, lawyers who recommended an investment for a client, was found liable for the client’s losses of about $7 million in the scheme. Salomon recommended investment in Triglobal Capital, a wealth management firm that was operating a Ponzi scheme. The scheme was run by Themis Papadoulos and Mario Bright, and the two disappeared with about $100 million in investor funds. Unbeknownst to his clients, Salomon was receiving $20,000 per month plus additional funds as “gifts.”

Timothy Ray Carruthers, 60, was sentenced to 6 years after he pleaded guilty to charges last month. He defrauded 35 people in a scheme involving bogus mortgage loans. Carruthers represented that investor funds would be used to provide borrowers with bridge mortgage financing through his company, Wakina Consulting Inc.

India

Antaryami Behera of GAH Multi Trade Private Limited and two others were arrested in connection with an alleged scheme that defrauded investors out of around Rs 26.

Authorities have arrested four more people in connection with CashCoin, a fake cryptocurrency scheme run by mastermind Ashok Goyal Jaipuria.  In addition to Jaipuria, Asif Malpani, Pradeep Arora and Baljit Singh Saini have been detained. The scheme involved about $14.5 million. Last month, Alpesh Barodia, 32, KiranKumar Panchsara, 38, Sanjay Sontakke, 44, and Rajnikant Kumavat, 46, were arrested.

  

Ireland

Garret Hevey aka James Baker, 43, and David Peile aka David Marshall, 42, were accused of running a Ponzi scheme that involved more than €5 million. The forestry investment scam was run through Arden Forestry Management. About €5.5 million was deposited with the company from about 143 investors. The investments would have required that around 858 acres of land be serviced, but the company only owned 30.2 acres.

Japan

Masato Doko, 41, Tokiji Nakamura, 66, Teruhisa Miyoshi, 60, and several others were charged on allegations that they were running a Ponzi scheme through Texsear Japan Holdings. The scheme promised interest of 3% on investments in increments of one million yen. Texsear held seminars entitled “The Assembly to Energize Japan” to solicit investments.

Kenya

Ricardo Rocha, a Brazilian who founded Velox 10, took hundreds of millions of shillings from Kenyan investors in a cryptocurrency scam. Velox 10 promised unrealistic returns from bitcoin, and investors had to pay a membership fee and upgrade fee (about $300) and the amount of profit for investors was supposedly tied to the fees paid initially. Other investors were promised returns of 30% to 50%. The website for Velox 10 has been closed.

Lagos

Growing Circle International (G-Circle) was shut down by the SEC on charges that it was engaged in a Ponzi scheme.

New Zealand

Kelvin Clive Wood, 69, pleaded guilty to charges relating to a fraudulent scheme run through Forex (NZ) Limited and Forex NZ 2000 Limited. Wood defrauded 18 clients out of more than $7 million. 

Joshua Paul Johnston, 35, was sentenced to 5 years in prison. The scheme brought in about $3.4 million and left investors with about $2 million in losses. He told investors that he was starting a business installing electronic equipment and that investors would receive a return on their investments. Johnston pleaded guilty last year. 

Pakistan

Regulators shut down nine Ponzi cryptocurrency companies. The SEC of Pakistan issued the following statement: “The SECP has advised public not to be misled by any schemes/deals/plans being offered by these companies: Gold Transmit Network Technology (Pvt.) Limited, Green Apple Super Market (Pvt.) Limited, Galaxy Typing Jobs (SMC-Pvt.) Limited, 3-A Alliance (Private) Limited, Pak Memon Impex (Private) Limited, Memon Corporation (Pvt.) Limited, Humanitas Meritus (SMCPrivate) Limited, IDG Enterprises (Private) Limited and Ayat Enterprises (Smc-Private) Limited.

Philippines

The Securities and Exchange Commission made its cease and desist order against Kapa-Community Ministry International Inc. (KAPA) permanent. KAPA, a religious organization, offered and sold securities in the form of investment contract that were disguised as donations. KAPA encouraged members to “donate” any amount in exchange for a 30% monthly return. KAPA also operates as KAPA Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-Co Convenience Store and General Merchandise, and KAPA Worldwide Ministry.

Turkey

Mehmet Aydin, 26, was indicted, along with about 47 others, in connection with the Ciftlik Bank Ponzi scheme. Ciftlik (Farm) Bank was an online virtual farming simulator that offered investors generous returns. Aydin and his brother, Fatih Aydin, remain at large.

Vietman

Kittikorn Wanwasuthon, 61, was arrested in connection with an alleged Ponzi scheme that defrauded victims out of three billion baht through Coffee Cash Bank Co. The scheme promises investors 105% interest per month. Thai police requested the arrest, but another suspect, Sirawanphon Chaiwacharakhup, 52, managed to escape.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

Securities America Inc. was sued for $18 million by an investor who invested through broker Hector A. May while he was at the firm. May pleaded guilty to running a Ponzi scheme last year and was fired by Securities America after he was accused of stealing client assets. May allegedly ran the Ponzi scheme with his daughter, Vania May Bell, over a 17-year period. The complaint alleges that Securities America failed to supervise the broker and ignored “stark red flags.”

General Electric Capital Corp. yesterday reached a $49 million settlement to resolve claims that it allegedly covered up the Thomas Petters Ponzi scheme. The trustee of two Florida hedge funds alleged that they lost $650 million in connection with the Petters scheme and sought damages from GECC’s alleged misconduct in conspiring to commit fraud by not disclosing the Petters scheme.

Investors in Lancelot Investors Fund were given permission to purse their lawsuit against RSM in connection with the $3.65 billion Ponzi scheme run by Thomas Petters.

February 2019 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for February 2019. The reported stories reflect at least 3 new Ponzi schemes worldwide; about 39 years of newly imposed sentences for people involved in Ponzi schemes; and an average age of approximately 54 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Donato Baca Jr., 36, Jonny Ngo, 32, and NL Technology LLC were charged by the SEC in connection with an alleged $61 million Ponzi scheme that defrauded over 350 investors. The scheme promised returns from NL Technology’s wholesale technology import business. Without admitting or denying the charges, Baca consented to judgment permanently enjoining him from any future securities violations and ordering him to pay $4.7 million in disgorgement along with interest and penalties of over $1 million.

Jeff Carpoff and his company, DC Solar Inc., were accused by the FBI of running a Ponzi scheme. DC Solar sold solar panels to supply emergency power to cell towers and to provide lights at sporting events. The FBI alleges that it was running an $800,000-plus Ponzi scheme. Carpoff and his wife, Paulette Carpoff, touted the tax benefits of investing in alternative energy in luring in investors. The company filed bankruptcy this month as well.

Homero Joshua Garza, 33 was sentenced to 21 months in prison for his involvement in the PayCoin cryptocurrency scheme that defrauded investors out of $9 million. 

Todd Hitt, 54, of Virginia pleaded guilty to charges related to a $20 million Ponzi scheme. Hitt falsely claimed that his firm, Kiddar Capital, managed $1.4 billion in assets. The scheme involved various real estate projects, but Hitt improperly commingled funds and used investors funds for personal expenses like vacations and sports tickets. 

Patrick Joseph Kiley, 80, lost his appeal of his 20-year sentence for his involvement in the Trevor Cook Ponzi scheme. The Eighth Circuit found that Kiley’s challenge based on ineffective assistance of counsel and alleged potential conflicts of interest of his counsel was not sufficient to reverse his sentence. Kiley, along with Cook ran a $193 million Ponzi scheme. 

Edward Lee Moody, 47, was sentenced to 13 years in prison and ordered to pay $4.8 million in restitution in connection with a Ponzi scheme run through CM Capital Management LLC. Moody solicited about $6.6 million from 55 investors, some of whom were elderly and liquidated the retirement accounts so they could invest. Moody did not actually buy and sell securities for the most part, but instead used the money for his personal benefit. 

James Nickels, 67, of Wisconsin, reached a plea agreement regarding charges that he ran a Ponzi scheme through The Fiscal Concierge. Nickels had collected more than $5 million from at least 35 investors to whom he had sold promissory notes. The investors’ losses totaled about $3 million, and Nickels was ordered to pay $3.6 million in restitution. 

  

Lynette Robbins, 73, and her company, Knowles Systems Inc., agreed to repay $1 million of the funds that they received in connection with the $1.2 billion Woodbridge Group of Companies LLC Ponzi scheme. Robbins raised about $147 million from investors by advising them that the investments in Woodbridge were “safe and secure.”

Niket Shah, 26, of New Jersey, and his company, Spark Trading Group LLC, who had been charged by the SEC in connection with an alleged Ponzi scheme that brought in $250,000, were the subject of a final judgment. The scheme involved a binary options trading account. The judgment permanently enjoins them from further violations of security laws and orders them to disgorge about $300,000.

Robert Shapiro, Jordan Goodman, Albert Klager, Ferne Kornfeld and Barry Kornfeld were permanently banned by the SEC from ever working as brokers or investment advisors due to their selling unregistered securities for Woodbridge Group of Companies. The $1.2 billion Ponzi scheme defrauded 8,400 investors by selling them unregistered promissory notes and securities in supposedly low-risk investments in luxury real estate. Shapiro alleged spent around $21 million of investor funds on personal expenses and luxuries, and the Kornfelds, Goodman and Klager netted a total of over $7.4 million in commissions. Floyd Powell was also barred by FINRA; he sold Woodbridge notes to 13 investors and consented to a settlement without admitting or denying the allegations.

Shawn Patrick Watkins, 48, was sentenced to 51 months in prison in connection with a Ponzi scheme that he ran with Angel Bronsgeest, 55, through The Equity Growth Group and Investors Workshop Inc. They promised investors returns from real estate deals but diverted funds for their own use. Watkins conducted monthly seminars in which he offered investments in bridge loans to acquire properties.

INTERNATIONAL PONZI SCHEME NEWS

Benin

Guy Aplogan and Ludovic Dohou, both senior directors of ICC Services, an investment firm, were jailed for 10 years for a scheme that may have defrauded more than 150,000 out of more than 150 billion CFA francs. The scheme promised returns of 150% to 200% per quarter. 

Canada

About $136 million worth of cryptocurrency supposedly held by QuadrigaCX is missing. Stockholders say that the holdings are stuck in an electronic vault because the company’s founder and sole employee died without sharing the password. Researchers say that publicly available transaction records suggest that the money may be gone.

Timothy Ray Carruthers, 59, pleaded guilty to running a $5.3 million Ponzi scheme. The scheme involved fake bridge mortgage loans. Only about $1.7 million of the funds were repaid.

Yan Zhu aka Rachel Zhu and Guan Qiang Zhang had their bank accounts seized in connection with an alleged Ponzi scheme that defrauded 464 people. The scheme was run through Bossteam E-Commerce Inc., which described itself as an online advertising business. About $4.8 million was used to pay administrative penalties in connection with the case.

Arnold Breitkreutz, 70, and Base Finance Ltd. were ordered to pay more than $4 million in penalties in connection with a Ponzi scheme that brought in $137 million from investors and left them with $122 million in losses. Office administrator Susan Elizabeth Way, 67, was ordered to pay an administrative penalty of $150,000 and to disgorge $362,000.

Ghana

Wealth Drive Ghana Limited, Global Coin Help Limited, and TCL Market Ghana Limited were allegedly operating a Ponzi scheme and had promised returns of between 10% and 30%. More than 9,000 Ghanians invested in the scheme. The companies have been arraigned for prosecution for operating without licenses.

Japan

Masato Doko, 41, and Keizo Adachi, 58, along with 8 others, were accused by the police of running a Ponzi scheme through Texsear Japan Holdings. The scheme brought in ¥46 billion from 13,000 investors. The company held seminars titled “The Assembly to Energize Japan” to solicit investors and promised returns from “businesses that are expected to grow rapidly.” Tokiji Nakamura, 66, and Teruhisa Miyoshi, 60, are among the eight in custody.

Nigeria

The SEC shut down Dantata Success and Profitable Company, which was carrying out capital market activities without proper registration. The company promised investors returns of between 25% and 50% from supposed returns in trading, oil and gas, transportation and import, export. Hajiya Basira Dantata started the business as a family business and the reported business was to solicit funds from investors.

The SEC shut down Growing Circle International Limited, an international advertising company with headquarters in the U.S. The company allegedly engaged in illegal fund management activities that are described as a Ponzi scheme.

South Africa

Jacques Magliolo was accused of running a Ponzi scheme through his business, Business Consultants International. Magliolo, who has published more than 17 books on investment advice, denies the charges.

Thailand

Thirty investors filed complaints against CryptoMining.Farm, a cryptocurrency cloud mining company. The scheme allegedly defrauded 140 victims out of more than $1.3 million. The company is believed to be operated by Lifetime Technology Co. Ltd. and is linked to possible owner, Pimongkol Tawpibarn. The scheme may have promised guaranteed returns of 70% per year.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The receiver over ClearPath Wealth Management LLC filed a motion to include former employee, and former House Minority Leader, Patricia Morgan, as an insider. Morgan was an employee but has appealed the designation of her as an “insider.” Patrick E. Churchville, the owner and president of ClearPath, was sentenced to 84 months in prison for orchestrating the $21 million Ponzi scheme that defrauded more than 110 investors. 

The Second Circuit revived billions of dollars of lawsuits brought by the Trustee in the Bernard Madoff Ponzi scheme by permitting the lawsuits seeking to recover transfers of assets made overseas. The trustee had sued foreign investors for recovery of funds that had initially been paid to foreign feeder funds, and the court found that a foreign subsequent transferee could be sued to recover property that had been transferred to it by a foreign initial transferee. 

Wells Fargo was dismissed from multidistrict litigation brought against it by investors in the Telexfree Ponzi scheme. 

Investors in the scheme run by United Development Funding III filed a proposed class action to recover their losses in the failed real estate lending scheme.

The FBI is soliciting information from investors in Bitconnect, using a voluntary questionnaire to acquire information about their interaction with Bitconnect.

January 2019 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for January 2019. The reported stories reflect at least 5 new Ponzi schemes worldwide; about 40 years of newly imposed sentences for people involved in Ponzi schemes; and an average age of approximately 54 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Phillip Michael Carter, 44, of Texas was accused by the SEC of running a Ponzi scheme that raised $45 million from investors. The alleged scheme was run with Bobby Eugene Guess and Richard Tilford and defrauded 270 investors. Investors were sold short-term, high-yield promissory notes issued by shell companies involving real estate transactions. Carter and Tilford were indicted last year and Guess is currently serving a 12-year prison sentence after pleading guilty to a similar but unrelated scheme.

Ford F. Graham, 55, and his wife Katherine B. Graham, of New Jersey, were sued by the New Jersey Bureau of Securities based on allegations that they were fraudulently selling investments in gas and oil projects. They raised more than $5 million through loans and sales of unregistered securities which they offered through their companies, Specialty Fuels Americas, LLC, Aries Energy Group Venture, LLC, CCC Holdings, LLC, and Rattler Partners, LLC. The lawsuit alleges that Graham represented that investor funds would be spent on specific oil and gas projects, but he instead transferred the funds among his companies and another company that he controlled, Vulcan Energy International LLC.

Jose Luis Leon, 56, Richard A. Renner, 56, and Natalie Marie Rogers, 53, all of Florida, were arrested and jailed on allegations that they stole about $7 million from more than 20 investors. They ran a purported investment fund company called Strategic Holdings Group in which they represented they could provide access to exclusive investments, such as “energy-related limited partnerships, real estate, tax liens, private equity, precious metals and other ‘alternative assets.’” They promised returns of about 8% annually. Instead, they used the investors’ funds on personal expenses.

Kevin Merrill, 53, was caught trying to give his wife, Amanda Merrill, instructions to “drink the good wine” and otherwise hide assets. A note with instructions to Amanda was found in his sock in prison when he was headed to a jailhouse visit with Amanda. Merrill has been charged with running a $364 million Ponzi scheme that defrauded more than 400 victims. He has pleaded not guilty to an alleged scheme run with Jay Ledford, 54, and Cameron Jezierski, 28.

John Kevin Moore, 62, of Montana was sentenced to 10 years and five months in prison and ordered to pay $2.2 million in restitution and $1.9 million in forfeiture in connection with a Ponzi scheme involving oil and gas leases. Moore ran the scheme through Big Sky Mineral Resources LLC and Glacier Gala, using the investors’ funds to supposedly buy oil and gas leases and to buy and sell lucrative art work. Prosecutors alleged that Moore collected $2.7 million from investors and spent $1.4 million on himself.

Ronald D. Morley and his wife, Diane Morley, were sanctioned in the amount of $4 million in connection with their sale of fraudulent securities through their companies, The New Wealth LLC, Main Street Estate Group, Inc., and Jenny DB Properties LLC. They defrauded 130 investors to invest $33 million in preferred stock in Nevada-based Summit Trust Company. They received $3 million in commissions through several Maryland-based businesses they operated in allegedly “fraudulent offerings of unregistered securities.”

James Mulholland and Thomas Mulholland had their prison sentences cut in half. The two brothers had been sentenced to 10 to 20 years in 2016 in connection with an $18.3 million Ponzi scheme that defrauded more than 250 investors. The judge cut the sentence to 3.75 to 20 years, noting that leaving them in prison would not help make the victims whole again. They owe approximately $208,000 in restitution.

William Rittenbaugh, 47, who is in custody for allegedly running a cattle Ponzi scheme, had his bond increased to $3.75 million. Additional charges were added relating to cattle and horse theft.

Daniel B. Rudden, 71, reached a plea agreement with prosecutors in connection with a $20 million Ponzi scheme that he ran through Financial Visions. The company took assignments of life insurance policies to pay funeral expenses and charged the surviving families 4% to 5% for the service. The scheme had about 200 investors and promised to pay them 12% to 15%.

Robert H. Shapiro and Woodbridge Group of Companies LLC were ordered to pay more than $1 billion to resolve the SEC’s claims that Woodbridge operated as a Ponzi scheme.

INTERNATIONAL PONZI SCHEME NEWS 

Australia

John Bigatton, a director of BitConnect, had his assets frozen in connection with the virtual currency scheme. Bigatton was the representative of BitConnect in Australia but was also the director of BitConnect International PLC in the United Kingdom. BitConnect was supposedly a crypto lending platform and promised returns as high as 40% per month. His wife, Madeline, disappeared at the time investigations of Bigatton started and is presumed dead. She was the director of JB’s Investment Management.

Canada

Renee Michelle Penko was jailed for 30 days for her failure to appear at a debtor examination hearing. She was found in contempt. Penko, along with Irene G. Beilstein and Susan Grace Nemeth, were finders for a Ponzi scheme run through Global Wealth Creation Opportunities that defrauded 123 people out of $11.7 million. Investors were promised returns of 2% to 6% per month. The scheme was masterminded by Thomas Arthur Williams, who owes $21.8 million in fines and disgorgement fees in connection with the scheme.

Ghana

Menzgold Ghana Limited was flagged as a Ponzi scheme, and the Securities and Exchange Commission ordered the company to stop unlicensed public gold trading activities. Menzgold would buy gold and pay interest to investors in the amount of 10% per month. The firm has been unable to pay premiums to investors because of the order to stop taking deposits from customers. The scheme is believed to have impacted over 1.8 million customers. There is a warrant for the arrest of Nana Appiah, the Menzgold CEO, who is believed to be hiding in Nigeria or South Africa.

Winchester Profits Capital, claiming to trade in currencies and commodities, was accused of running a Ponzi scheme. More than 2,000 Ghanaians have subscribed online, pursuing the promised interest of 12.5% weekly.

India

Nalini Chidambaram, the wife of former Finance Minister P Chidambaram, was charged in connection with the Saradha Group of Companies Ponzi scheme.

Shaik Ismail Amjad, 42, was charged in connection with a scheme run through Winzee Welfare Society. Amjad misrepresented that he was collecting money to provide financial assistance to poor people for marriage expenses, health problems and monthly rations.

Police arrested 57 people in a crackdown relating to the QNet scam. QNet is a multi-level marketing scheme, and the assets of the company have been frozen. Dilip Raj, the director of Vihaan Direct Selling Pvt Ltd., a sub-franchisee of QNet, was arrested for allegedly running a Ponzi scheme. Chandan Kumar Chowdary and Athul Kumar were also arrested in connection with the alleged scheme.

Brajamohan Patnaik and his wife Tridhara Mohanty were accused of defrauding investors in connection with an alleged scheme run through finance company Datum. 

I Ravindran, 55, his wife R Indhumathi, 47, and son R Vignesh, 27, were arrested in connection with a scheme that defrauded nearly 1,500 investors who deposited 2.9 crore. The scheme was run through All Shine Agro Farm India Ltd.

Tabrez Pasha and Tabrez-Ullah Shariff were arrested in connection with an alleged scheme run through the Ajmera Group that defrauded about 950 investors.

Nigeria

Giniko Obi, a bishop, was arrested for allegedly defrauding thousands of victims in a Ponzi scheme.  Obi is the founder of Beloved Gideon Foundation and said he was “doing the will of God by trying to help the people fight poverty.”

South Africa

Fakazile Mazibuko, 55, and Wilson Gazu, 55, were each sentenced to 15 years in jail in connection with their Trade For Life scheme that offered a get-rich-quick plan in more than 3,000 investors. They had previously been involved in another scheme operated through Travel Venture International.

Taiwan

Officials pressed charges against 7 individuals for allegedly running a bitcoin Ponzi scheme. The scheme allegedly defrauded more than 1,000 investors out of $51 million.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

A group of defrauded investors sued Zions Bank for allegedly aiding and abetting a fraudulent scheme run by Rust Rare Coin and its owner, Gaylen Rust.

The Fifth Circuit reversed the lower court’s ruling and found that one of Stanford International Bank’s largest investors cannot retain $79 million in fraudulent transfers that he received. Janvey v. GMAG LLC, 2019 U.S. App. LEXIS 759 (5th Cir. Jan. 9, 2019). The court found that an investor cannot successfully assert a good faith defense when on inquiry notice of the Ponzi scheme. Inquiry notice was defined in the jury instructions as follows: Inquiry notice was defined in the jury instructions as "knowledge of facts relating to the transaction at issue that would have excited the suspicions of a reasonable person and led that person to investigate."

A federal judge dismissed a series of cases asserting claims for aiding and abetting and unjust enrichment against Bank of America, TD Bank, and PricewaterhouseCoopers in connection with the Telexfree Ponzi scheme case. The court said that was not evidence that the defendants had participate in, or willfully ignored, the fraud. See, e.g., In re Telexfree Secs. Litig., 2019 U.S. Dist. LEXIS 13681 (D. Mass. Jan. 29, 2019).

The Eighth Circuit dismissed claims against Associated Bank for aiding and abetting in connection with the Trevor Cook Ponzi scheme. Cook was charged with running a $194 million Ponzi scheme. The court found that, “The record shows nothing beyond the provision of routine banking services or, at worst, sloppy banking. The bank provided nothing beyond its standard professional services to assist the scammers in perpetrating their Ponzi scheme. No reasonable factfinder could conclude that Associated Bank provided substantial assistance to the scammers’ tortious conduct.”

December 2018 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

Below is a summary of the activity reported for December 2018. The reported stories reflect at least 9 new Ponzi schemes worldwide; about 144 years of newly imposed sentences for people involved in Ponzi schemes; 3 guilty pleas or convictions, and an average age of approximately 51 for the alleged Ponzi schemers. Please feel free to post comments about these or other Ponzi schemes that I may have missed.

Gershon Barkany, 34, was sentenced to 56 months in prison in connection with a $62 million Ponzi scheme that defrauded more than 10 victims. Barkany had pleaded guilty to wire fraud in 2013 in connection with the scheme that persuaded more than 10 people to invest in supposed “risk-free” deals to buy and resell real estate in New York and New Jersey. He fooled investors by creating false documents, including purchase agreements and escrow agreements.

Annette Bongiorno, 70, the former secretory for Bernard Madoff, is seeking an early release from prison. Bongiorno has served two-thirds of her 6-year prison sentence and is asserting that she should be released to home confinement. Bongiorno maintained that she was unaware of Madoff’s Ponzi scheme.

Vincent P. Falci, 59, of New Jersey, was convicted on charges in connection with a $10 million Ponzi scheme. The scheme stole money from the savings of policemen, firemen, and retirement funds for first responders. More than 200 victims were defrauded when Falci told them that their money was conservatively managed and would generate high returns with little risk. Falci controlled investment funds under the names Saber Funds and Vicor Tax Receivables LLP.

Jordan E. Goodman of New York was charged with securities fraud by the SEC in connection with his activities in soliciting investments into the real estate Ponzi scheme known as Woodbridge Group of Companies. The scheme, run by Robert Shapiro, brought in $1.2 billion, and Goodman’s 1,200 clients invested about $147 million of that amount. Goodman helped a company known as Knowles Systems, Inc., owned by Lynette M. Robbins, raise the funds. Robbins was charged by the SEC in connection with the scheme in August. Goodman did not disclose to his clients that he was receiving kickbacks for their investments. He received about $2.3 million in kickbacks. Goodman holds himself out as “America’s Money Answers Man,” and he advertised the Woodbridge investment in media appearances, calling the investments “safe” and “secure.” Alan H. New and David S. Knuth, co-owners of Synergy Investment Services, were also charged. The following additional 10 individuals were also charged: Robert S. "Lute" Davis, Donald Anthony Mackenzie, Aaron R. Andrew, Jeffrey L. Wendel, Randy T. Rondberg, Richard Fritts, Marcus Bradford Bray, Gregory W. Anderson, Claude Steven Mosley, and Gregory A. Koch.

Michelle Labra, 47, of Illinois was charged in connection with an alleged real estate Ponzi scheme that took more than $23 million from more than 25 investors. Labra is a suburban real estate broker who owned and operated Labra Group Realtors. She promised investors returns of more than 14% on short-term, high-interest mortgages to borrowers. However, prosecutors allege that Labra never actually underwrote any loans and told investors that the reason investors were not getting their money and returns was because the IRS had seized the funds.

Thomas Lanzana, 51, formerly of New Jersey and now of South Carolina, was accused of running a Ponzi scheme that defrauded at least 20 people out of about $900,000. Lanzana falsely claimed that he was a successful forex trader, delivered false account statements to his customers showing falsified balances, and sent false tax documents to customers reporting earnings that did not exist. Last year, the CFTC filed a civil enforcement action against Lanzana and Blackbox Pulse, LLC.

Juan Miguel Lopez, 54, of Texas, was sentenced to 79 years in prison for operating a Ponzi scheme that defrauded investors out of $4.9 million. Lopez fraudulently promised investors returns from the supposed financing of small business loans. He targeted Hispanics who were not otherwise able to obtain loans.

Hector May, 77, and his daughter, Vania May Bell, both of New York, were charged by the SEC with running a $7.9 million Ponzi scheme through Executive Compensation Planners Inc. They were accused of lying to investors by telling them their money was invested in bonds when in reality the money was spent to pay for personal and business expenses as well as luxury items such as jewelry, furs, vacations and a limousine driver. Criminal charges were also brought against May, who has pleaded guilty to the charges.

Steve Pagartanis, 59, of New York pleaded guilty to charges relating to a Ponzi scheme that spanned 18 years and scammed 17 victims. Over $13 million was invested in the scheme and there were actual losses of more than $9 million. Pagartanis solicited elderly victims to invest in real estate-related investments that were supposedly secure and earned fixed returns between 4.5% to 8%. Investors were told that their money was being invested in a publicly traded Canadian company called Genesis Land Development. Instead, he used the money to pay for his personal expenses and on luxury items such a jewelry, airline tickets, massages and cigars.

Priceville Partners LLC, a used car and title loan company, was labeled a Ponzi scheme by its bankruptcy trustee, calling it “really no different than a little Bernie Madoff.” Greg Steenson, 49, was the managing partner of Priceville Partners and is currently in jail awaiting trial on charges including theft, forgery, securities violations, and financial exploitation of the elderly.

Ernest Romer III, 57, of Michigan was sentenced to 7 to 20 years in prison for spending $3 million of his clients’ money. Romer worked for CoreCap Investments LLC and targeted senior citizens by convincing them to invest their funds with him. Instead, he used their money for high-risk investments and for personal expenses.

Denise Gunderson Rust and Joshua Daniel Rust were included in the CFTC complaint against Gaylen Dean Rust and Rust Rare Coin, Inc. in which the CFTC alleges that the defendants were running a precious metals Ponzi scheme. Denise and Joshua are accused of knowing that Silver Pool, a commodities pool, was a fraudulent scheme and that they signed checks issued to Silver Pool investors knowing that they were Ponzi payments. The amended complaint also alleges that the pool involves 430 individuals and at least $200 million, up from the 200 individuals and $170 million that was originally alleged.

Brian Thomas Sapp, 38, pleaded guilty to charges relating to his $1.4 million real estate Ponzi scheme that defrauded 20 investors. Sapp claims he was buying distressed properties in Virginia, Maryland and Washington D.C. and would sell them generating returns as high as 25%. Sapp used DocuSign to forge digital signatures on fraudulent contracts to prove to investors that he was supposedly selling houses and generating the returns he had promised.

John Gregory Schmidt, 67, was arrested on charges in connection with an alleged scheme run through Schmidt Investment Strategies Group. Schmidt created false financial statements and sold securities without the knowledge or approval of his investors. Prosecutors have alleged that, “For years, this defendant defrauded a number of investors, many of them elderly or with dementia. He had to keep stealing from more investors in order to cover for the thefts from other investors,” The SEC has also filed charges.

Gary Todd Smith, 49, was sentenced to 40 years in prison and ordered to pay $63.4 million in restitution in connection with a scheme run with his father, Gary Truman Smith, through Smith Advertising, a North Carolina agency that represented local tourism agencies. The Smiths borrowed money from more than 150 investors and the agency was worth negative $169.8 million when it collapsed in 2012.

Jeremy Spence was sued along with others in connection with an alleged Ponzi scheme run through Coin Signals. Spence allegedly held himself out as a successful crypto trader, offering “lucrative returns” supposedly generated through a series of crypto hedge funds including Alts Fund, Long Terms Fund, Evermarkets ICO, and Coin Signals Mex (CSM) Fund. The complaint alleges that the CSM Fund held as much as 1,300 Bitcoin valued at more than $10 million.

Christopher B. Warren, 50, of Florida, was charged in Tennessee with running a solar farm Ponzi scheme in Nashville. Warren founded Clean Energy Advisors, claiming to own solar farms in North Carolina which would be sold to Duke Power. Warren defrauded 60 investors and promised them returns from the supposed sale revenues. Warren pleaded guilty and admitted there was never going to be a sale and that he still owes investors at least $15 million.

INTERNATIONAL PONZI SCHEME NEWS

Australia

Aimee Ploi Pitman, 27, and her partner, Colin Voeuk, 32, were sentenced to seven years in jail in connection with an ATM Ponzi scheme that defrauded up to 17 investors out of $1.7 million. The pair pleaded guilty to benefit by deception. Pitman was a lifestyle blogger who was the face of the scheme.

Chris Marco, 60, has been accused of running a $240 million Ponzi scheme that defrauded 130 investors. The scheme, run through Coastline Group, allegedly promised investors large profits from complex financial deals in Europe.

Cambodia

Huot Sovann is the subject of extradition proceedings in connection with a $400 million Ponzi scheme that defrauded tens of thousands of Cambodians. The scheme was run through Empire Big Capital, Asian Investment Fun, and Investment Consultant Association. The scheme promised returns of 10% on minimum investments of $2,000.

China

Six people were arrested in connection with an alleged $173 million scheme run through financeofchina.com that claimed to be a peer-to-peer lending platform. The scheme allegedly promised annual returns of 14% but did not have a financial license.

England

Mark Starling, 57, was arrested in connection with an alleged £3 million Ponzi scheme. Starling claims to be running three funds – the Pilot Dax Fund, the Shadow Dax Fund, and the Pilot Eurostoxx Fund. He was a self-described “proprietary futures trader” and promised investors returns of 12% to 18% per year.

India

Methuku Ravinder, the chief executive officer of Sun Pariwar Group of companies, was arrested and assets of Rs 14 crore were frozen. Ravinder had been a government school teacher but, unhappy with his salary, he started as many as 8 businesses, such as Sun Mutually Aided Thrift and Credit Cooperative Society Ltd, Methuku Chit Funds, and Methuku Ventures, all operating under the umbrella of Sun Pariwar.

Premkumar aka Mukesh Katara was arrested for defrauding investors in connection with Dream Pacific Vision scheme. The scheme promised investors doubling of their money.

Police arrested 10 individuals in connection with an alleged Bitcoin-related Ponzi scheme called GB21. The scheme defrauded 8,000 investors and promised them 10% or more in monthly returns. Amit Bharadwaj and his brother Vivek had been arrested in connection with Gain Bitcoin earlier in the year. Akash Sancheti and Sahil Omprakash Bagla were also arrested in connection with the scheme.

Babita Ravat, 36, was accused of running a Ponzi scheme through her company, Jeevan Seva Company Pvt. Ltd. Ravat had 20,000 agents luring in investors into the scheme.  Co-owners of the company, Ravi Kadam and Sandeep Behravat, were arrested as was Mustaq Shaikh, who used to work at the company. Harish Labana and Indrajeet Prajapati are still on the run.

New Zealand

Kelvin Clive Wood, 69, pleaded not guilty to charges that he was running a $7 million Ponzi scheme as a foreign trader. The more than $7 million was taken from 18 investors.

Lance Jack Ryan aka Lance Thompson, who was sentenced last year to 7 ½ years in prison for his role in the BlackfortFZ Ponzi scheme that defrauded 900 people, had his sentenced reduced. The scheme had lured in approximately $8.3 million, and about $4.1 million of that was lost as no foreign exchange trading actually occurred. Jimmie McNicholl was convicted and also sentenced to 11 months home detention in connection with the scheme. Ryan had pleaded guilty and appealed his sentence as being too high relative to comparable sentences. Ryan was resentenced to 6 years imprisonment.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The receiver appointed to administer the Arthur Lamar Adams and Madison Timber Properties LLC $100 million Ponzi scheme case filed a complaint against the law firms Butler Snow and Baker Donelson LLC and two employees of the firms. The receiver alleges that the firms and individuals acted recklessly in advising investors. Both firms and the individuals have denied any involvement or wrongdoing in the matters alleged. Separately, the University of Mississippi agreed to return about $310,000 that was donated to the University by Adams.

The Ninth Circuit upheld a lower court ruling that an investor who referred other investors into the Nationwide Automated Systems Inc. Ponzi scheme was forced to return about $750,000 in referral fees. The court found that the referral fees did not constitute “reasonably equivalent value. Hoffman v. Markowitz, 2018 U.S. App. LEXIS 36243 (9th Cir. Dec. 24, 2018).