Ponzi Scheme Roundup: April 2018

Posted on 05-11-2018 by
Tags: Ponzi Scheme


By Kathy Bazoian Phelps 

Ponzi Scheme Roundup: April 2018 

Below is a summary of the activity reported for April 2018. The reported stories reflect at least 12 new Ponzi schemes worldwide; over 1,060 years of newly imposed sentences for people involved in Ponzi schemes; and an average age of approximately 47 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.

James Quinn Campbell, Jerald N. Kagarise, David Allen Bjorklund, Ronald E. Caskey, Erik K. Little and Timothy C. McGuire all agreed to cease-and-desist orders with the Colorado Division of Securities for their role in selling unregistered securities for the Woodbridge Group of Companies LLC. Laurent Carrier and his company, Carrier Financial Services, surrendered their Colorado securities licenses earlier this year.

Amrit Jaswant Singh Chahal, 30, and his company, The Kane Capital Investment Group, LLC, were charged by the CFTC in Virginia with running a commodities fraud. The alleged scheme solicited more than $1.2 million from approximately 50 investors. The scheme promised trading profits of between 28% and 34% from the supposed trading in crude oil futures contracts. Chahal used some of the money for his personal benefit, including for a luxury car, rent, travel and dining.

David deBarardinis, 56, was indicted on new charges that he defrauded banks and investors in Louisiana out of $96 million in an alleged Ponzi scheme. He pleaded not guilty to the charges. Investors were promised rates up to 17% with guaranteed returns and they understood that deBarardinis was a middleman in fossil fuel trades between energy companies.

Seyed Reza Ali Fazeli, 49, who has pleaded not guilty to running a sports ticket Ponzi scheme through Summit Entertainment Group, was sued by investors who alleged that the business was a Ponzi scheme. Fazeli represented that he would use the $1.3 million invested by the plaintiffs to purchase tickets to the 2017 NFL Super Bowl and resell them at a profit.

Daniel Glick, 64, was sentenced to more than 12 years in prison and ordered to pay $5.2 million in restitution in connection with a Ponzi scheme that he ran through Financial Management Strategies, Glick Accounting Services, and Glick & Associates in Chicago. The scheme involved $5.2 million taken from elderly investors.

Renwick Haddow, 49, was extradited to the U.S. after he fled to Morocco last year on charges that he was running a Ponzi scheme. Haddow, a British citizen, had relied on a fake identity using the name of Jonathan Black and a photo he stole from LinkedIn. Haddow had opened several Bar Works locations in New York and offered investors the opportunity to purchase desks at the locations for $25,000 each.

Bernard Ross Hansen, 57, and Diane Renee Erdmann, 45, were accused of running a Ponzi-like scheme that defrauded more than 3,000 investors out of $25 million. Hansen is the founder and CEO of Northwest Territorial Mint. The indictment alleges that the mint, which made coins and medallions and bought, sold and stored precious metals, lacked assets to fill customer orders. Hansen and Erdmann allegedly took $1 million of the investor funds to pay their personal expenses.

Jeffrey Mitchell Isaacs was ordered to pay $750,000 for selling New Jersey investors more than $7 million worth of unregistered securities for Woodbridge Group of Companies. Isaacs sold the unregistered securities through JB Financial Resources and JMI Associates LLC. The Woodbridge scheme defrauded 8,400 investors across the country.

Shayne Kniss, 42, was charged in Oregon for running an alleged scheme through his investment firm, Iris Capital Management Group. About 47 people invested over $4.3 million. Kniss promised investors returns of 8% to 12% returns from supposedly buying, rehabilitating and reselling houses. Instead Kniss used some money to pay back earlier investors, and about $500,000 for personal use, including investing in a retail marijuana business.

Robert Loya, 53, and Clarence Counterman, 60, had their convictions upheld by the Fifth Circuit. The two tax preparers had been convicted of running a $2.1 million Ponzi scheme. The scheme involved solicitation of investments into their solar energy related companies, including Renewable Energy Consultant Inc. (Nevada), EP Solar Technologies, Inc. (Nevada), LITTCE, Inc. (Texas) and Eco Global Corporation (Texas).

Joseph Meli, 43, and Steven Simmons, 49, were sentenced to 6½ years and 37 months, respectively, in connection with a $100 million Ponzi scheme run through Sentinel Growth Fund Management. Simmons pleaded guilty last year to charges that rose in connection with scheme that supposedly resold tickets to “Hamilton” and other shows. Meli and Simmons had assisted the hedge fund manager, Mark Varacchi, in raising money for the scheme. Varacchi pleaded guilty and has been cooperating with prosecutors.

Stephen Condon Peters, 44, saw additional assets seized in connection with alleged $15 million Ponzi scheme run through VisionQuest Wealth Management. Peters was indicted in December 2017 in connection with the scheme which promised investors returns of 8% to 9%.

Clifton E. Stanley, 66, and Michael E. Watts, 62, and their companies, The Lifepay Group LLC and SMDRE LLC, were charged by the SEC in Texas with running $2.4 million Ponzi scheme and a related $1.4 million scam involving an oil and gas company. About 30 elderly investors invested in the retirement planning and real estate investment company in which they were promised returns of up to 36% per year.

Michael Sullivan, 37, was sentenced to 160 years in prison and will serve an active prison sentence of 5 years in connection with this role a Ponzi scheme run through his company, Kenhill Financial. Sullivan was a day trader who stole about $1.4 million from 15 victims.

INTERNATIONAL PONZI SCHEME NEWS

Canada

Wade Robert Closson, 47, who pleaded guilty to 55 counts of fraud for running a Ponzi scheme, will be sentenced. Closson ran the scheme through Optam Holdings, Inc. and Infinivest Mortgage Investment Corporation. About 71 investors lost about $5.8 million in the scheme.

China

Officials shut down a $13 million cryptocurrency Ponzi scheme run through Da Tang Coin (DTC). About 13,000 people were defrauded on promises that members would make about 80,000 yuan ($13,000) every day.

Eight individuals were charged in connection with the Shanlin Finance Ponzi scheme. Zhou Boyun, the legal representative of Shan Lin Financial, turned himself in earlier in the month. The scheme was a peer-to-peer lending platform. Shanlin had more than 500,000 registered users and had raised 5.4 billion yuan. The company had more than 1,000 outlets across the country to sell wealth management fund products packaged with lending to infrastructure and public-private partnership projects. Users were promised annual returns ranging from 5.4% to 15%.

Dubai

Each of the two Indian men, Sydney Lemos, 37, and Ryan D’Souza, 25, who ran the Exential Group foreign exchange fraud, received 517-year prison sentences, as did Lemos’ wife, Valany Lemos. Exential offered up to 120% annual returns in connection the fraudulent investment program that defrauded 7,000 investors.

India

Amit Bhardwaj, 35, was arrested for defrauding investors in a number of cryptocurrency schemes including GainBitcoin, GBMiners, MCAP and GB21. His scam is believed to have involved over 8,000 people adding up to $300 million. Two additional arrests were made of Sahil Baghla and Nikunj Jain in connection with the scheme.

Kalakahnu Bisoi and his wife Monalisha Senapati were arrested on charges that they ran a money deposit collection Ponzi scheme.

Naresh Navale, 35, was arrested on charges that he defrauded 500 investors through his company, S M Motors. The scheme involved a car rental business in which he said he would purchase expensive cars to rent them to five-star hotels and big companies. Investors were promised Rs 20,000 per month.

Pradeep Singhal was arrested on charges that he defrauded thousands of investors in a Ponzi scheme run though a number of companies, including Astonish Digital Advertising Services. The scheme involved companies who held themselves out as facilitator for increasing views of commercial websites.

Deepak Jangra and Deepak Malhotra were arrested in connection with a $2.6 million Ponzi scheme run through Bitmineplus. Investors deposited and bought bitcoins from the company which offered returns as high as 12% plus a 5% referral fee and 10% commissions for bringing in additional investors. The website advertised: “Bitmineplus is a unique service that allows you to immediately profit from your dormant Bitcoin. It takes just seconds to transfer your Bitcoin from your wallet to your Bitmineplus saving [sic] account and you will immediately begin to receive daily interest payments.”

Nigeria

Swiss Golden Company Limited was accused of defrauding over 7,000 Nigerians out of N3 billion. The scheme involved the buying and selling of gold bars. Maxim Lobaty, a Russian, and two Nigerians, Austin Emenike and Dickson Nonso Onuchukwu, were picked up by authorities.

Philippines

Arnel Ordino and his wife Leonady were arrested on charges that they defrauded at least 50 investors out of $17.32 million through their company, New G Bitcoin Investment Trading. The scheme promised investors a 30% return every 15 days. The couple actually had no Bitcoin dealings and made payouts to investors using money from new victims.

Russia

Authorities sought to ban Telegram, a company run by Pavel Durov who has “decided to become the new Sergey Mavroidi.” Telegram has allegedly raised about $1.8 billion in the pre-sale stage of its ICO

NEWSWORTHY LEGAL ISSUES IN PENDING PONZI SCHEME CASES

The Madoff Victim Fund made a second distribution to victims of the Bernard L. Madoff Ponzi scheme. A distribution of $504 million was made to about 21,000 victims, bringing the total distributed through the Fund to more than $1.2 billion. A total of more than $4 billion could be distributed from the Fund. In the separate SIPC proceeding, the trustee has distributed about $11 billion to the customers of Madoff’s securities firm.

Investors in the Woodbridge Group of Companies, LLC sued sales agents Lynn Merritt and Annua Group LLC seeking to recover $1.86 million in losses from the alleged Ponzi scheme run by Robert H. Shapiro. The scheme allegedly defrauded 8,400 investors out of $1.2 billion. Shapiro and his sales agents promised returns of 5% to 10% on their investments.

CRYPTOCURRENCY NEWS

Ifan and Pincoin, which were cryptocurrency startups in Singapore and Dubai, respectively, have gone silent after reports that they were fraudulent schemes. An estimated 32,000 investors were defrauded out of an alleged $660 million in tokens. Both schemes were under the control of Vietnam-based Modern Tech. Modern Tech had been promising users in Vietnam 48% returns monthly for iFan tokens if they made an initial investment of $1,000. Users were also given 8% commissions for referring new investors.

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