Monday, August 31, 2015

August 2015 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps

    Below is a summary of the activity reported for August 2015. The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 39 years of newly imposed sentences for people involved in Ponzi schemes; at least 3 new Ponzi schemes involving over $143 million; and an average age of approximately 59 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.

    Bryan Anderson, 41, was sentenced to 7 years and 3 months in prison in connection with a Ponzi scheme to which he had previously pleaded guilty. Anderson defrauded a dozen investors out of more than $3 million. During most of the scheme, Anderson was a registered financial broker working with MetLife Securities and then Pruco Securities.

    Roland Barrera, a bar owner, was ordered to pay a $150,000 penalty for breaking federal regulations when he helped persuade a businessman to invest $3 million in a Ponzi scheme run by Robert Helms and Janniece Kaelin through their company, Vendetta Royalty Partners, Ltd., claiming to have royalties on 2,000 oil and gas wells. The scheme involved as many as 129 investors who invested at least $18 million. Helms and Kaelin were the subject of a summary judgment against them, stripping them of their ability to work in investment industry.

    John R. Burns III, 56, was sentenced to 7 years in prison in connection with a Ponzi scheme run through USA Retirement Management Services. Burns persuaded investors to invest in bogus Turkish bonds. His scheme was part of a large scheme run with Robert Pribilski, 57, and Mahmt Erhan Durmaz, 45, in which they defrauded 120 investors out of $28 million. Pribilski pleaded guilty last year, and Durmaz fled the U.S. in 2010 and is believed to be residing in Turkey.

    Terina Carney aka Teina Humphrey, 49, pleaded guilty to running a Ponzi scheme in which she stole more than $415,000. Carney ran her scheme through Riverside Lease LLC, and investors were promised returns of 10% to 30%.

    Cristal Clark, 41, was acquitted of charges of running a Ponzi scheme through Cay Clubs, and a mistrial was declared as to her husband, Fred “Dave” Clark. Cay Clubs had sold interests in luxury resorts that were to be developed nationwide, promising returns of 15% to 20%. They had raised more than $300 million from approximately 1,400 investors. An SEC action against the Clarks had previously been dismissed as being untimely. Two others involved with Cay Clubs, Barry Graham and Ricky Lynn Stokes, had previously pleaded guilty and received sentences of 5 years each.

    Carlos Garza and his brother, Josh Garza, were sued by the SEC in connection with GAW Miners. GAW is alleged to have violated securities laws through its sale of Hashlet miners and its cryptocurrency, Paycoin. Last year, GAW moved more toward its “Paybase” system of payments and formed strategic partnerships with Walmart and Amazon.

    Richard M. Higgins, was sentenced to 14 years in prison after pleading guilty to charges that he ran a Ponzi scheme through Higgins Capital Management and Higgins Equity Partners. Higgins defrauded investors out of more than $600,000 by assuring them that he was a registered advisor and reporting returns to them of between 18% and 174%. In fact, he experienced losses of between 80% and 91%.

    Irwin Lipkin, 77, was sentenced to 6 months in prison in connection with the Bernard Madoff Ponzi scheme. Lipkin had pleaded guilty to charges relating to the falsification of documents at a time when he was Controller for Madoff’s company. When he left the company, he instructed his successor on how to falsify the records and he also manipulated his own account to retain significant capital gains. Lipkin’s wife also remained on the payroll for many years, even when she was not performing any services.

    James H. Mason, 67, was sentenced to 8 years in prison and ordered to pay $4.3 million in restitution in connection with a $4.7 million Ponzi scheme that defrauded at least 500 investors. The scheme purported to be a foreign exchange investment program.

    Ron Earl McCullough and David Christopher Mayhew had a default judgment entered against them, which provides that they will have to pay $1,223,388.43 in restitution and 42,486,619.87 in civil monetary penalties for operating a foreign exchange Ponzi scheme. McCullough and Mayhew were accused by the CFTC of violating commodities laws in connection with a fraudulent scheme that solicited about $2.3 million from at least 11 victims.

    Steven Palladino, 58, was sentenced to 2 years in prison for violating an asset freeze and other court orders in a civil case brought by the SEC relating to a Ponzi scheme for which he is already serving a 10 to 12 year sentence. Palladino was sentenced last year after pleading guilty to stealing $10 million from investors through his company, Viking Financial Group.

    Wayne Palmer, 60, and his cousin Julieann Palmer Martin, 47, of Utah, were indicted on charges that they ran a Ponzi scheme which defrauded more than 600 investors out of $140 million. They ran the scheme through National Note of Utah, a company that supposedly extended real estate loans, engaged in other real estate activities, operated a mint, and extracted precious metals from mine tailings. The company promised investors consistent returns of 12% per annum.

    Albert Rossini, 67, Babajan Khoshabe, 74, and Anthony Khoshabe, 33, were indicted on allegations that they defrauded at least 15 victims out of $2.9 million. They represented that investors would receive rental income from purchasing purported mortgage notes on apartment buildings in foreclosure, and that they would get title following the foreclosure. Thomas Murray, 61, a licensed Illinois attorney, was also indicted for his alleged role in validating the sale of the mortgage notes through a phone “Guaranty Agreement” that he prepared and gave to Rossini to present to victims. Rossini and Babajan Khoshabe allegedly told prospective investors that Anthony Khoshabe managed the mortgaged properties through his position at Reliant Management, which shared office space with Devon Street Investments Ltd.

    Keith F. Simmons, 50, and Deanna Salazar received one of the largest fines ever handed out by the CFTC. They were fined $76 million for fraudulently soliciting and accepting $40 million from 240 individuals for their off-exchange forex trading program known as Black Diamond. Simmons was sentenced to 40 years in prison and Salazar was sentenced to 4.5 years, and both are currently serving their sentences. The court entered consent orders against Simmons and Salazar and her companies, Life Plus Group LLC and Black Diamond Holdings LLC. Also charged are Bryan Coats and his company, Genesis Wealth Management LLC, and Jonathan Davey, and his companies, Divine Circulation Services LLC, Divine Stewardship LLC, Safe Harbor Ventures Inc., Safe Harbor Wealth Investments Inc., and Safe Harbor Wealth Inc.

    Michael J. Stewart, 68, was convicted in connection with a Ponzi scheme that defrauded 647 investors out of $169 million. Stewart represented to investors that he would acquire distressed apartment buildings that he would flip for a profit. Stewart ran the scheme through Pacific Property Assets with John Packard. Pacific Property had filed for bankruptcy in 2009, listing 647 investors. Packard had pleaded guilty in 2014 and testified against Stewart at trial. Both are scheduled to be sentenced in November.

    Frederick Alan Voight, 58, was the subject of an SEC complaint alleging that Voight raised $114 million through his enterprises, DayStar, FAVA, Rhine, Topside, Intercore, and IRC, to fund a Ponzi scheme. Voight claimed that he was using the money to fund research for public companies and he promised up to 42% annual interest. One investment opportunity supposedly funded a technology called “DADS”, a Driver Alertness Detection System that would warn sleepy drivers.

    William Donnelly Yotty, 69, pleaded guilty to charges in connection with his operation of a $16 million Ponzi scheme through companies he operated under the names Global Capital Associates, Inc., Infostar Systems, Inc., Pacific Financial Solutions, Inc., and The Money People, Inc. The schemes defrauded about 240 investors. Yotty offered investments in corporate debt obligations and in distressed real estate, offering investors annual returns as high as 25%. In a separate scheme that he operated under the name Fortuno, Yotty offered victims the opportunity to purchase foreclosed real estate at below-market prices so that they could supposedly flip the properties at two or three time the purchase price.

INTERNATIONAL PONZI SCHEME NEWS

Canada

    Keith Henry Alexander admitted to engaging in the illegal distribution of securities and unregistered trading in connection with the Ponzi scheme run through The Little Loan Shoppe by Doris Nelson. Alexander raised $14 million from 13 investors.

    Milowe Brost, 61, filed an appeal following his conviction for running a $400 million Ponzi scheme along with Gary Sorenson, 71. The scheme defrauded more than 3,000 investors and was run through their company, Syndicated Gold Depository S.A. They formed an agreement to lend money to Merendon Mining, promising a high rate of return. Victims invested in offshore shell companies marketed by Brost's firms, Capital Alternatives Inc. and Institute for Financial Learning Group of Companies Inc. Both men were sentenced to 12 years in prison.

    Christopher Steeves and his brother, Jeremy Steeves, lost an arbitration in which they were ordered to pay about $658,000 for their role in a Ponzi scheme. The brothers received unlawful referral commissions for recruiting investors into Golden Oaks Enterprises, a company owned by J.C. Lacasse. The brothers also received more than 60% annually on their own investments and secured second mortgages on 18 properties owned by Lacasse’s Rent 2 Own Canada.

Cayman

    Brighton SPC Fund was taken over by the Cayman Islands Monetary Authority. The fund, believed to be worth $130 million, belonged to Belvedere Group.

China

    Lu Kuan-wei and Chen Yun-fei were arrested in Taiwan in connection with the alleged Ponzi scheme targeting bitcoin users through a company called MyCoin. Investors were convinced to invest 90 bitcoins ($49,600), and they were to receive a return of .63 BTC per day. They were to receive back their principal after 4 1/2 months, which would be an annual return of 255%.

India

    Manoj Kumar Sahu, Pintu Saha, and Adhis Haldar were arrested for alleged involvement in Ponzi scheme activities of MPA Agro Animal Projects.

South Africa

    The Financial Services Board provisionally withdrew the license of Ntinga Health and Financial Services following allegations that Ntinga was running a Ponzi scheme. The company promised guaranteed returns of 98% per year. The FSB identified Armstrong Luthando Mazizi as the individual running Ntinga, as well as Geinisiko Mantashe as a signatory on the company’s bank accounts.

    The Financial Services Board provisionally withdrew the license of a foreign exchange brokerage firm called ACM Gold and Trading for its links to a Ponzi scheme. ACM held short-term investment accounts for Platinum Forex, whose assets were frozen last month. Platinum Forex was run by pastor Colin Davids, who promised returns of up to 84% by trading funds on the forex market.

    Sergey Mavrodi, previously convicted of fraud in Russia, has launched a new online allegedly fraudulent scheme in South Africa. The scheme, called MMM like his predecessor scheme, offers returns of 30% per month. The website contains the following message: “This is the first sprout of something new in the modern soulless and ruthless world of greed and hard cash. The goal here is not the money. The goal is to destroy the world's unjust financial system.” The website also describes the system as a “technical basic program, which helps millions of participants worldwide to find those who need help, and those who are ready to provide help for free.”

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

    The motion of Associated Bank to dismiss the complaint of the receiver of Trevor Cook was denied. The lawsuit alleges that the Bank is liable in connection with Cook’s $194 million scheme. The bank had tried, unsuccessfully, to dismiss the receiver’s suit on in pari delicto and res judicata grounds. Cook had promised risk-free returns to over 700 investors in commodities and futures trading, raising more than $200 million.

    Federal prosecutors have challenged a court order directing them to turnover the tax returns of wealthy investors who were defrauded in the alleged $190 million Ponzi scheme of Ramon DeSage, 64, that he ran through his company, Cadeau Express. DeSage contends that the investors failed to report to the IRS the cash that he paid back to investors. He wants to use the tax returns to attack their credibility. Prosecutors say that the court order “order authorizes a rank fishing expedition that puts the victims' sensitive financial data in the hands of the defendant, effectively victimizing them a second time.”

    Henry J. Haff and Diane M. Lis Haff were not permitted to take an additional $731,000 tax deduction relating to funds they claimed were owing to them from a Ponzi scheme called GSH Development LLC. They argued that the funds were never included in income.

    A settlement was documented in connection with the Bernard Madoff Ponzi scheme in which Citco Group Ltd. agreed to pay $125 million to settle claims brought by Fairfield Greenwich Ltd., one of the Madoff feeder funds. Fairfield alleged that Citco had failed to properly administer funds that ended up being invested in the Madoff scheme. About 3,000 investors claim an interest through Fairfield.

    California Polytechnic State University has agreed to pay $480,000 to have the name of Al Moriarty removed from a 53-foot advertisement on the scoreboard in the school’s football stadium. Moriarty was previously convicted or running a $22 million Ponzi scheme. Moriarty used his company, Moriarty Enterprises, to solicit investor into his scheme promising 10% returns from a program that provided home loans to educators. Moriarty was known for his philanthropy and had donated $625,000 to Cal Poly in exchange for the advertisement in Cal Poly’s football stadium.

    A court dismissed a lawsuit against GE Capital Corp. that arose from the Tom Petters Ponzi scheme. The trustee of Ark Discovery, a lender to Petters, had sued GE Capital alleging that it had aided and abetted Petters’ fraud.

    FSC Securities Corp. was found liable for $1.28 million in an arbitration brought by investors who were defrauded in the Ponzi scheme run by Aubrey Lee Price. FSC was one of the broker dealers involved in the scheme, and investors had alleged that FSC failed to supervise brokers who sold the investors “unspecified fraudulent securities as part of a Ponzi scheme.”

    About 14,000 victims in the TelexFree Ponzi scheme received a distribution from a $3.5 million fund that was set up as a result of a settlement between the Massachusetts Securities Division and Fidelity Co-Operative Bank.

    The ZeekRewards receiver made a third distribution to victims of the scheme for 489.2 million. The raises the total amount distributed to $24605 million. The scheme is believed to have raised money from at least 2.2 million customers.

Friday, July 31, 2015

July 2015 Ponzi Scheme Roundup

Posted by Kathy Bazoian Phelps


    Below is a summary of the activity reported for July 2015. The reported stories reflect: 10 guilty pleas or convictions in pending cases; over 166 years of newly imposed sentences for people involved in Ponzi schemes; at least 11 new Ponzi schemes involving over $112 million; and an average age of approximately 50 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.

    Alisa Adler, 54, was charged with running a Ponzi scheme the involved a real estate development business run through ASG Real Estate Services Group. She solicited investor funds to supposedly purchase and develop real estate but instead used the money to make Ponzi scheme payments and for her personal expenses.

    Will Allen, 36, was indicted for his involvement with a Ponzi scheme run with Susan Daub, 55, through Capital Financial Partners LLC.  The scheme involved $31 million and supposedly provided high interest short term loans to athletes. More than 40 people invested in the scheme and were promised 18% returns.

    John Steven Blount, 54, pleaded guilty to charges relating to a $5.8 million Ponzi scheme that he ran through his company, Professional Consultants LLC. Blount offered investments in fictitious companies, bonds and IRAs. The scheme defrauded at least 73 investors to which he sent false account statements.

    Michael M. Burke had his law license suspended for 18 month by the New Hampshire Supreme Court for his role in the FRM Ponzi scheme.

    Hernan Del Valle, 61, was charged in connection with an alleged meat exporting Ponzi scheme that involved $750,000. Del Valle ran a firm called Lion Trading Corp. in which it supposedly shipped meat products to 9 businesses in the Dominican Republic. Valle submitted false invoices to banks to obtain loans and then used the cash to pay off earlier loans.

    Todd Dyer, 51, already facing charges that he ran a $1.5 million Ponzi scheme through Midwest Farmland Properties and American Farmland Properties, was indicted in connection with a particular transaction in which he stole funds from an investor promising that he had other investors and universities ready to fund an additional $25 million. Dyer had previously received a 70 month sentence in 1999 for a Ponzi scheme. 

    Michael R. Enea, 60, was sentenced to 2 years in prison for his $2.1 million Ponzi scheme that defrauded at least 10 people. Enea had promised investors annual returns between 20% and 35%.  The scheme was run through his business, Credit Card Equipment Plus Inc. Enea had spent $1.35 million of the $2.1 million to pay false returns to investors and spent the rest on himself.

    Daniel Fernandes Rojo Filho, 47, and his company, DFRF Enterprises, were charged by the SEC with operating a combined pyramid and Ponzi scheme. The alleged scheme targeted Spanish and Portuguese-speaking communities, and investors were told that DFRF’s gold mines in Brazil and Africa would realize a return of 100% on each kilogram produced. The scheme allegedly raised more than $15 million from at least 1,400 investors. The SEC complaint ties Filho to Sannderley Rodrigues de Vasconcelos, who has been tied to the TelexFree scheme. Others charged in connection with the scheme were Wanderley M. Dalman, 49, Gaspar C. Jesus, Eduardo N. Da Silva, 40, Heriberto C. Perez Valdes, 46, Jeffrey A. Feldman, 56, and Romildo Da Cunha. Filho was then arrested after he was captured outside of a Boca Raton restaurant.

    Edwin Fujinaga, 68, Junzo Suzuki, 66, and Paul Suzuki, 36, were criminally charged with their roles in the MRI International Inc. Ponzi scheme that defrauded thousands of Japanese victims. The scheme involved $1.5 billion, and investors were told that their investments would be held by a third party escrow agent in Nevada. Investors were promised that their money would be used to purchase medical accounts receivable. Meanwhile, the SEC obtained a judgment against June Fujinaga and the Yunjo Trust to return $2.4 million in ill-gotten gains.

    Dorian Garcia, 30, pleaded guilty to running a $7 million Ponzi scheme. Garcia was accused of defrauded 80 victims out of $4.7 million through his businesses, DG Wealth Management, Macroquantum Capital LLC and UKUSA Currency Fund LP.

    Kelly Gearhart, 54, was sentenced to 14 years in prison following his guilty plea that he misrepresented information about his Vista Del Hombre real estate project through Hurst Financial Corp. Gearhart was accused of defrauding more than 250 investors out of $15 million. James Hurst Miller Jr. is scheduled to be sentenced in October.

    Stephen Bruce Gordon, 62, was sentenced to 4 years and 2 months in prison for running a $4 million Ponzi scheme. Gordon was once a high profile basketball trainer who worked for the Seattle Supersonics. He admitted to running schemes that defrauded about 30 investors.

    Neal Goyal, 34, was sentenced to 6 years in prison and ordered to pay $9.2 million in restitution in connection with a $9 million Ponzi scheme that he ran through his companies, Blue Horizon Asset Management LLC and Caldera Investment Group. Goyal created false statements to give to investors to support his supposed trading business, in which he promised returns of at least 17% per year.  He stole money from his family and friends in his Hindu community. He raised more than $11 million from at least 35 investors.

    Jenifer E. Hoffman pleaded guilty to charges in connection with the $11 million Ponzi scheme that defrauded 100 investors. Hoffman had been charged along with John Boschert and Bryan T. Zuzga for their involvement with the scheme run through Assured Capital Consultants, LLC. They had represented that the investments would provide weekly returns of up to 50% and would be invested in Assured Capital’s offshore, confidential trading program.

    Charles D. Jones, 61, was sentenced to 6 years in prison for stealing more than $9 million from his clients in a Ponzi-like scheme. Jones ran the scheme through his company, Charles D. Jones Capital Management Inc.

    Phillip A. Kramer and Timothy C. Constantine were found guilty of defrauding NHL players and other investors. The two defendants ran at last four separate schemes: Hawaii Real Estate Investment, Eufora LLC, Global Settlement Fund, and Sag Harbor.

    Paul Konigsberg, 79, was spared prison time following his guilty plea last year to conspiracy charges and falsifying books and records in connection with the Bernard Madoff Ponzi scheme. Konigsberg has said that he “had no knowledge that Bernard Madoff was a diabolical monster masking himself in the clothing of a self-made billionaire.” Konigsberg, an accountant, was accused of looking the other way as Madoff employees amended information on some of his clients’ transactions. The judge agreed that what Konigsberg did was "seriously wrong" but that he did not know that Madoff was defrauding investors out of $20 billion. The judge found that he had earned leniency through his cooperation.

    Shaine Joseph LaVoie, 46, was sentenced to 20 years in prison and ordered to pay more than $820,000 in restitution for a Ponzi scheme involving close out clothing and a fictitious apparel company. LaVoie had turned down a 5 year plea deal. There were 12 victims who were promised 100% returns in 3 months.

    Charles Maguire, 33, is the subject of many civil complaints, at least one of which alleges that Maguire was running a $13.4 million Ponzi scheme that defrauded individuals associated with Christian churches and organizations. Maguire represented that he ran a financial company, Vivid Funding LLC, that provided "proof of funds" letters for corporations. Corporations would supposedly use his bank accounts to show they had assets when applying for bank loans. Maguire also had another company, M-Development Inc., that was supposedly involved in mobile application software. William Peterseim has been identified by the U.S. Attorney's office has being a financial advisor involved with the scheme.  Maguire has not yet been criminally charged.

    Claude Darrell McDougal, 56, was sentenced to 6½ years and ordered to pay about $2 million in restitution for running a Ponzi scheme that defrauded over 25 investors out of more than $2.5 million. He promised investors returns of 6% to 15% and that their money would be invested in securities in the form of promissory notes offered by US Financial Alliance Consultants, LLC.

    Sean M. Meadows, 42, was sentenced to 25 years in prison for running a Ponzi scheme that defrauded about 55 victims out of more than $10 million. Meadows solicited funds through his investment adviser business, Meadows Financial Group, and he promised he would invest funds in bonds, real estate or other investments and pay 10% returns.

    Stavroula Mendez, 68, Lazaro Mendez, 42, and Marie Mendez, 49, were sentenced to 135 months, 108 months, and 57 months, respectively, in connection with a $27.8 million mortgage fraud Ponzi scheme. The defendants owned condominium developments and would locate straw buyers. They would then submit falsified mortgage applications to secure home loans to purchase condo units in the development that they owned. When they units sold, they would retain both the profits on the sale and control over the units.

    Paul Lee Moore IV, 51, pleaded guilty to charges relating to a Ponzi scheme that defrauded investors out of about $2 million. Moore ran his securities scheme through Coast Capital Management LLC. The SEC also charged Moore in connection with the scheme.

    Eric Nicholas Morgan was charged in connection with an alleged Ponzi scheme that he ran through his company, Liquid Ninja. Neither Morgan nor Liquid Ninja are licensed in the state of Indiana. Liquid Ninja marketed a new energy drink and investors were promised 7.5% returns for two years for investing in the company. At the end of two years, investors were told they could either redeem their principal or receive a 15% interest in the company. The money was used by Morgan for his own personal expenses, and Liquid Ninja has closed its business.

    Leigh Morse, 59, was denied her request to have her restitution obligation of $1.7 million reduced or eliminated. Morse was involved as the dealer in the Salander-O’Reilly Galleries Ponzi scheme. Morse had been found guilty in 2011 of defrauding artist estates and foundations by misleading them about the status of works that the gallery sold or traded away. Morse has proclaimed her innocence and claims that she cannot pay the restitution.

    Dee Allen Randall, 64, was ordered to stand trial in connection with an alleged Ponzi scheme that defrauded about 700 people out of $72 million.  Randall was the owner of Horizon Mortgage & Investment, Horizon Financial & Insurance Group and Horizon Auto Funding, and his agents sold “Horizon Notes” that promised 9% to 17% returns for the supposed use of investor funds to finance car loans and real estate.

    Keith Everts Rode, 48, was sentenced to 70 months in prison in connection with the Ponzi scheme run through GLR Growth Fund, which Rode ran with John Geringer and Christopher Luck, 58. The scheme promised returns of 17% to 25%. Geringer and Luck were already sentenced to 12 years and one month and 10 years and 8 months, respectively.

    Guillermo M. Sanchez, 60, his daughter Isabel C. Sanchez, 36, and son-in-law Gustavo Giral, 38, were indicted in connection with an alleged $10 million Ponzi scheme that involved fake merchandise sales and a factoring scheme.

    Michael Szafranski, 37, pleaded guilty to charges relating to the Scott Rothstein $1.2 billion Ponzi scheme. Szafranski was accused of deceiving his clients in encouraging them to invest in Rothstein’s scheme

    Perry Sawano, 51, was sentenced to 28 years in prison in in connection with a Ponzi scheme that defrauded 28 investors out of $4.4 million. Sawano operated his scheme through Integrity Financial Consulting.

    Malcolm Segal, 69, was accused by the SEC of conducting a Ponzi scheme that defrauded at least 6 people out of $3 million. Segal is a financial advisor that is accused of using investor money to pay for a Florida condominium, vacations and other personal expenses. He ran his own branch office of Aegis Capital Corp., operating under the name of J& M Financial. Before that he was a financial adviser at Cumberland Brokerage Corporation. Segal purchased CDs but did not put them in his clients’ names; rather, he maintained control over them and redeemed at least 76 of the 134 CDs purchased, using $5 million proceeds for Ponzi-like payments and for his own expenses.

    Justin T. Spearman, 27, was arrested on charges that he ran a multi-million dollar oil and gas Ponzi scheme. Spearman operated his company, Justin T. Spearman Petroleum Land Services LLC, in Texas.

    Bogdan K. Stepien, 34, was indicted on charges that he ran a Ponzi scheme through his day trading business.  The indictment alleges that Stepien defrauded 8 people and that he sent them bogus trading account statements and spreadsheets.

    Richard L. Thompson, 60, was charged with defrauding investors in his $2 million real estate Ponzi scheme. The scheme was run through Latten Management LLC. Thompson represented that his company owned three properties in Tennessee and that he would develop them into vacation destinations. Thompson never put properties in the name of the business.

    Marcello Trebitsch aka Yair Trebitsch, 37, pleaded guilty to operating a Ponzi scheme that defrauded investors out of about $6 million through his company, Allese Capital LLC. Trebitsch is the son-in-law of the former New York Assembly Speaker Sheldon Silver. Trebitsch promised investors annual return of 14% to 16% from day trading large cap stocks.

    Charles S. Wang and Francis Y. Yuen pleaded guilty to charges relating to the eAdGear Ponzi scheme. The SEC had charged eAdGear on September 2014 alleging a $129 million scheme.

    Carl David Wright was fined $1 million by the CFTC for defrauding 16 customers in a commodities Ponzi scheme. Wright was previously sentenced to 4 years in prison for the scheme.

    Bingqing Yang, and her company Luca International Group LLC, were charged by the SEC for running a $68 million Ponzi scheme that targeted Chinese Americans in California. Her other companies, Luca Resource Group LLC and Luca Energy Fund LLC, were also charged. The scheme used the E-B 5 Immigrant Investor Program to solicit funds.  The SEC’s complaint also names Lei (Lily) Lei, Luca’s former vice president of business development; Anthony V. Pollace, former CFO; and Yong (Michael) Chen, owner of Entholpy EMC dba Mastermind College Funding Group. Luca was represented to be a successful oil and gas company and returns of 20% to 30% were promised to investors. It is believed that George W Bush was paid $200,000 by Luca to speak at a 2012 “energy summit.”

INTERNATIONAL PONZI SCHEME NEWS

Bulgaria

    Tsvetan Vasilev denied charges that he ran Corporate Commercial Bank as a Ponzi scheme.

Canada

    The Alberta Securities Commission has started publishing the names of individuals and entities that have been fined for financial-related crimes but have not paid the fines and penalties. The list current contains over 100 names that have failed to pay over $100 million in the aggregate.

    Gary Sorenson, 71, and Milowe Brost, 61, were sentenced to 12 years in prison following their conviction for operating a Ponzi scheme which that defrauded up to 2400 international investors of between $100-400 million. The two promised investors of $99,000 they would receive annual returns of 34% and that the $99,000 would turn into $1 million within eight years.

    Regulators warned that Nix Investment is not licensed to carry out business in Ontario. The company’s website shows signs of being a Ponzi scheme, stating, “We invest in Stock, Index, Commodities, Bitcoins and Forex. We aim for a 10-15% return per month which is 300% per year. So investment of $100 with us for 5 years can yield you more than $20000-25000. Recommend investment ($100-500).”

    Douglas Warren Welder was disbarred for his role as a lawyer representing a corporation that was operating a Ponzi scheme. Welder was not the perpetrator of the scheme but failed in his duties as a lawyer by not advising investors that he was not protecting their interests.
 
India

    Three directors of Bishal Group, which is accused of running a Ponzi scheme, were taken into custody. The directors are Ratan Chowdhury, Sujit Krishnapada Acharjee and Kanta Dubey.

Israel

    A check-cashing scheme that affected the ultra-Orthodox community in Bnei Brak was disclosed. The alleged scheme was run by Yaakov Domb, who defrauded individuals and businesses out of tens of millions of shekels that they had invested with him. Domb has disappeared without a trace.

New Zealand

    David John Hobbs agreed to never again direct a New Zealand company and to not provide financial advice or brokering services in the country. Hobbs was previously found to have breached laws in operating 14 schemes that involved over AUD $50 million.

    Hamish McIntosh, a lawyer who was ordered to repay $454,000 in profits that he received from the Ross Asset Management Ponzi scheme, has filed an appeal to the ruling. The liquidator of the scheme is considering cross-appealing.

Philippines

    The Securities and Exchange Commission is investigating Arnel Gacer and his company, Flag Prosperity Marketing Inc. aka Freedom Life Advanced Global Prosperity Marketing Inc. The SEC believes that the company recruits investors to invest in one to 15 slots, where one slot amounts to P1,500 and has a promised return of P2,200.

Spain

    Twenty people were arrested in connection with an alleged Ponzi scheme run by Unetenet. The scheme reportedly defrauded 50,000 investors out of 50 million euros.

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

    A court approved a settlement between the SEC and the receiver for Diversified Lending Group under which DLG will disgorge $163 million to end the SEC's civil suit.

    The trustee of the Deepal Wannakuwatte and IMG Inc. Ponzi scheme sued two real estate developers, Jack Sweigart and Larry Carter, alleging that they knew or at least should have known about the fraud that caused more than 100 investors to lose $150 million. The trustee alleges that the scheme could not have grown to its size without the letters of credit supplied by Sweigert, Carter and their companies, JTS Communities and Bristol Insurance Co. The trustee also sued two of Wannakuwatte’s lenders, Bridge Bank of Santa Clara and General Electric Capital Corp. Wannakuwatte was sentenced to 20 years in prison last year.

    The estate of Gladys C. Luria is seeking a $7.4 million refund from the IRS in connection with a false tax return filed by Bernard Madoff at Lurie's death claiming that she was worth $32 million. Luria's estate says that $7.4 million of the estate tax paid should be refunded because the balance of her Madoff accounts at the time of her death were actually zero. Madoff and his brother, Peter Madoff, were the co-executors of her estate. The estate argued that Madoff knowingly filed a false tax return to cover up his fraud.
 
    More than 100 investors from around the world have filed a class action lawsuit against Pearce & Durick, a law firm which was the escrow agent for North Dakota Developments LLC. The alleged Ponzi scheme defrauded people out of $62 million. The lawsuit alleges malpractice in that the law firm failed to advise investors that they were investing in unlawful securities.  The scheme involved 980 investors from 66 countries.

    BMO Harris Bank agreed to pay $16 million to settle litigation arising from the Thomas Petters Ponzi scheme. The lawsuit, filed by the major feeder funds in the scheme, Palm Beach Finance II LP and Palm Beach Finance Partners LP, alleged that M&I Marshall & Ilsley Bank, which BMO acquired, was complicit in the fraud.

    TD Bank agreed to pay $20 million to settle a class action lawsuit in relation to a Ponzi scheme that defrauded over 1,000 European investors out of more than $223 million. The investors had bought life settlements marketed through Quality Investments, a Dutch company. It was alleged that the bank had failed to report suspicious activity in connection with the scheme.