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Posted by Kathy Bazoian Phelps
Below is a summary of the activity reported for October 2019. The reported stories reflect at least 3 new Ponzi schemes worldwide; at least 10 guilty pleas, over 103 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.
Kraig Aiken, 51, agreed to plead guilty to charges relating to an alleged $1 billion Ponzi scheme. The scheme was run through Future Income Payments and involved the sale of military benefits, preying upon veterans and other investors.
C. Dean Alford, 66, was accused by investors of running a $6 million Ponzi scheme. Alford was formerly on the Georgia Board of Regents setting policy for the state’s colleges and universities. A group of investors sued Alford, alleging that there were 436 investors defrauded by Alford and others, including Alford’s wife, Dlugolenski Alford, and her son, David Dlugolenski, who deny knowledge of the scheme. Alford raised funds from investors to supposedly build a waste-to-energy plant. The alleged scheme was run through Allied Energy Services and Augusta Waste to Energy. Others invested with Alford through the Georgia Power Solar Farm Project.
Joseph S. Anile II pleaded guilty to charges relating to the $72 million Ponzi scheme run through Oasis International Group Ltd. The scheme defrauded 700 investors who were promised returns from pooled investments in the foreign exchange market. The following other entities and individuals were charged in connection with the scheme: Oasis International Group, Limited; Oasis Management, LLC; Satellite Holdings Company; Michael J. DaCorta; Raymond P. Montie, III; Francisco “Frank” L. Duran, and John J. Haas.
Syed Arham Arbab, 22, pleaded guilty to running a $1 million Ponzi scheme from his fraternity house at the University of Georgia. Arbab defrauded 117 investors to invest in Artis Proficio Capital Management and Artis Proficio Capital Investments, representing that those were hedge funds paying returns of 22% or 56%.
Jan Douglas Atlas, 74, pleaded guilty to charges that he facilitated a Ponzi scheme run through 1 Global Capital LLC. The scheme raised more than $330 million from thousands of investors through a purported commercial lending program.
James T. Booth, 74, was indicted in New York on charges of securities fraud in connection with an alleged Ponzi scheme run through Booth Financial Associates. He pleaded guilty later in the month. Instead of investing funds as promised in securities, Booth used most of the nearly $5 million of investors’ money to pay his personal expenses. Booth represented he would invest the funds in advisory and brokerage accounts but directed the money to the bank account of Insurance Trends Inc., an entity he controlled. About 40 investors lost their funds in the scheme.
Hal Herring Brown, Jr., 69, of North Carolina, was charged in connection with an alleged $13.5 million Ponzi scheme. Using his company Oodles Company, Brown claimed he was selling intellectual property to large companies. At least 23 investors were defrauded in the scheme.
Michael S. Cohn, a former SEC employee, was charged with obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information in connection with an alleged Ponzi scheme run through GPB Capital Holdings. Cohn is accused of using his position as an SEC investigator to access sensitive information upon his departure from the SEC and his employment by GPB Capital. Cohn allegedly accessed data on the SEC servers relating to its investigation of GPB. Last month, GPB Capital fired David Rosenberg without explanation, which followed Rosenberg filing a lawsuit alleging that GPB Capital was running a Ponzi scheme and inflating dealership values. A group of investors has also filed a class action against the company.
Christopher LuGrand Dawkins and his wife, Fern Carty Dawkins, were sued on allegations that they were running a real estate Ponzi scheme. The lawsuit alleges that they defrauded 35 investors out of at least $2 million.
Viktor Gjonaj, 42, of Michigan, has been accused in multiple lawsuits of running a real estate Ponzi scheme through Imperium Group, LLC. Gjonaj is real estate broker and denies the allegations.
Brian Lee Kissinger, 49, and Kenny Rojas, 41, of California, pleaded not guilty to charges that they were running a “scam resembling a Ponzi scheme.” Investors believed they were buying liens on distressed real estate properties through Kissinger’s company, Aria Management Group. The scheme involved about $1.5 million.
Rick Koerber was sentenced to 14 years in prison in connection with a Ponzi scheme that he ran through Founders Capital, Franklin Squires Investments, and Franklin Squires Companies. Koerber had promised returns of 24% to 60%.
Kevin B. Merrill, 54, was sentenced to 22 years in prison and ordered to pay $189.1 million in restitution in connection with a $396 million Ponzi scheme that defrauded investors out of $189.1 million. His wife, Amanda Mahlstedt Merrill, 30, pleaded guilty to conspiring to remove property and obstruct justice in connection with the scheme. Amanda had been caught removing cash from a safe in their $11 million vacation home in Florida. Jay Ledford, 55, had pleaded guilty and was also sentenced this month to 14 years in prison. Cameron Jezierski, 28, has also previously pleaded guilty to the scheme.
Mark Ray, 59, of Illinois, was sued by the SEC in a complaint accusing Ray of running a Ponzi scheme through a cattle trading operation and marijuana business. Reva Stachniw, 67, was named as a co-defendant on charges that she allowed Ray to use bank accounts she opened.
Ronald L. Roach, 53, and Joseph W. Bayliss, 44, pleaded guilty to charges relating to an alleged $2.5 billion Ponzi scheme through DC Solar Solutions. Roach is a certified public accountant and Bayliss is an electrician, and both have agreed to cooperate with authorities in the ongoing investigation of the DC Solar scheme run by Jeffrey and Paulette Carpoff. The Carpoffs were named in the plea agreements and neither has been charged in the case. The scheme offered investors tax incentives to lease mobile solar generators that could be used at racetracks and concerts and to power remote cell phone towers during power outages. But only about 3,000 to 5,000 generators of the 12,000 represented had actually been produced. Roach and Bayliss admitted to providing false reports that misled investors. Investor losses are estimated at $1 billion. The auction of the Carpoff’s car collection by the U.S. Marshals netted $8.2 million.
Scott Rothstein, 57, lost his appeal to the Eleventh Circuit seeking to get a reduction in his 50-year prison sentence.
David Gilbert Saffron of Las Vegas was charged by the CFTC with running a Ponzi scheme that defrauded at least 14 investors out of $11 million worth of Bitcoin. The scheme was run through Circle Society Corp. Saffron claimed that investors could double their money in two weeks by using trading bots on 57 separate computers.
Perry Santillo aka King Perry, 39, pleaded guilty to running a Ponzi scheme that obtained at least $115.5 million from about 1,000 investors. Investors are still owed about $71 million. Santillo was sued along with Christopher Parris by the SEC last year. The scheme was run through Lucian Development in New York as well as Advice and Life Group, Poconos Investments, First American Securities, and Financial Planners Group of America.
Robert H. Shapiro, 62, was sentenced to 25 years in prison for orchestrating the $1.3 billion Ponzi scheme run through Woodbridge Group of Companies, LLC. The scheme defrauded more than 8,000 investors and had promised them returns of up to 10% from real estate loans to property developers. In reality, the real estate was often owned by Shapiro or didn’t exist at all.
Fair Win, a gambling platform, was accused of running a Ponzi scheme when it was discovered that about $10.6 million in Ethereum had disappeared. Fair Win has denied allegations that it is a Ponzi scheme.
About $1.2 million previously seized from a Bitcoin Ponzi scheme remain frozen in an Indian bank account because the bitcoin cannot be converted into rupees under Indian banking laws.
Ganesh Rajan Bhavanam, 34, Lonachan Kuriaoke Kuriapuram, 50, Kishore Rokade, 46, Ankush Aher, 50, SS Ramesh, 34, and Ramesh Mane, 49, were arrested in connection with an alleged scheme run through AM Pictures. Investors were promised interest of 1% per day in addition to incentives like foreign trips and free gifts.
Properties held by Injaz International Associates Group Company were seized on allegations that the company ran a Ponzi scheme that defrauded thousands of investors.
Marcin and Katarzyna P. were sentenced to 15 years and 12½ years, respectively, for a Ponzi scheme run through Amber Gold. The scheme defrauded 18,000 investors out of $225 million. Investors were promised that their money would be invested in gold or other precious metals and they were promised returns of up to 16% per year.
David Wilmot, 47, was sentenced to 15 years in prison after pleaded guilty to running a scheme that defrauded investors out of R23m.
Greenberg Traurig agreed to pay $65 million to settle charges relating to its alleged involvement with the $7 billion Ponzi scheme run by R. Allen Stanford.