Ponzi Scheme Roundup: July 2017

Posted on 08-08-2017 by
Tags: Ponzi Scheme

ponzi scheme

By Kathy Bazoian Phelps

PONZI SCHEME ROUNDUP: July 2017

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

INTERNATIONAL PONZI SCHEME NEWS

Australia

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

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

China

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

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

England

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

India

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

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

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

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

Philippines

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

South Africa

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

Thailand

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

Vietnam

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

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

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

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

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

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