Most Recent
AdSurfDaily Agape agent American Integrity Aronson asset sales Attorney av bar reg baker bank bank of america Bankruptcy baumann bermudez black diamond blackwell bridge loan bull cattle CD celebrity cftc charity china China Voice church cityfund claims claims process clawback commission commodities commodity pool computer program congress Crown Forex currency death sentence denver diamond bar disgorgement Distribution Dodd-Frank donnan Dreier dunhill e-bullion elderly E-M Management SEC england Fairfield family FBI FDIC Fees female ponzi scheme financial advisor fine FINRA football forex fraud fufta fugitive Full Tilt gift card guilty plea GunnAllen hawaii Heckscher HSBC india invers forex janvey John Morgan JP Morgan kansas ken bell kenzie las vegas lawsuit lawyer libya Lifland machado Madoff Marian Morgan metro dream homes mets milberg millers a game Morgan European Holdings mortgage multiple schemes NCAA Net Winner new jersey notes objection Oxford Patrick Kiley paul burks PermaPave Pettengill Petters Picard poker Ponzi ponzi scheme ponzi scheme database ponzi scheme list Prime Rate profitable sunrise prosun pta puerto rico Rakoff real estate receiver receivership regulation relief defendants religion remission repeat offender restitution Rothstein RRA sec sentencing simmons sipa sipc snelling standing stanford stettin subpoena td bank telexfree treasury bonds treasury strip Tremont Trevor Cook UBS UFTA uga utah venture advisors Wachovia wilpon wire fraud woman zeek zeek rewards zeekler zeekrewards
Recent SEC Releases

Former NASCAR Driver And Son Of Convicted Swindler Indicted In $15 Million Ponzi Scheme

A Tennessee man whose father once served prison time for an oil-and-gas fraud has been indicted on allegations that he orchestrated a coal-mining Ponzi scheme that may have duped investors out of over $15 million.  Brian Rose, a/k/a John Haskins, was indicted on federal fraud charges along with eight other individuals, with authorities alleging that Rose was the ringleader of a coal mining venture that in reality was a devastating Ponzi scheme.  In addition to Rose, authorities also charged Robert McGregor a/k/a Jim Robinson III, Dallas McRae, Hugh Sackett, James Robinson, Brett Loveall, Jason Smith, Ray Spears a/k/a Brock Hamilton, and Jennifer Key.  Each of the nine face charges of conspiracy to commit wire fraud and mail fraud. 

According to the indictment, Rose operated numerous mining and coal companies including New Century Coal ("New Century").  New Century was marketed as an issuer/sponsor of various partnerships that were each assigned to the performance of a specific coal mine, distributing marketing materials to potential investors that touted "turnkey" mining operations set to commence after raising sufficient capital.  Investors were promised 6% quarterly returns while capital was being raised for operations, and 100% annual returns during the first year that mining operations commenced.  New Century is alleged to have employed "fronters" who identified potential investors from broker lists, publicly available information, and even victim lists of prior financial schemes.  After the fronters initially reached out, "closers" would then contact the potential investors with additional information and provide subscription documents. 

According to authorities, the New Century venture was nothing more than an intricate Ponzi scheme.  The indictment alleges that the documents provided to potential investors were fabricated, and that the defendants created "ghost" vendor companies to give the impression that New Century actually explored, developed, and mined coal.  Additionally, investors received fabricated financial statements, mining expenses, proof of existence of coal mines, and documentation of the existence of the coal.  Investors were not told that 20% of their investment was immediately paid to the applicable "closer," and that a significant portion of the remainder was diverted to sustain Rose's lavish lifestyle that included gambling trips to Las Vegas, horse racing, and to support Rose's NASCAR racing team.  

A simple Google search shows that the Rose family has had an extensive history with civil and criminal authorities related to the sale of securities. Rose's father, David G. Rose, was indicted in 2008 on multiple fraud charges related to two oil-and-gas projects that were alleged to be fraudulent.  The elder Rose subsequently pleaded guilty and was sentenced to a four-year term.  In August 2007, Brian Rose and his brother, Jason Rose, were the subject of a permanent restraining order obtained by the Kentucky Office of Financial Institutions that prohibited the company

from selling securities in Kentucky unless they disclosed in writing the negative legal history associated with any businesses run by members of the Rose family.

Several of the defendants are accused of providing false sworn testimony after the Securities and Exchange Commission opened an investigation in 2013.  Additionally, `Rose, McGregor, and Spears are accused of using false identities to evade detection by law enforcement, including Spears' and McGregor's legal changing of their names.  

The Indictment is below:


Brian Rose Indictment (1)




Pennsylvania Woman Charged With "Massive" Ponzi Scheme

Federal authorities have indicted a Pennsylvania financial advisor on charges that she orchestrated a "massive Ponzi scheme" that may have duped hundreds of victims out of millions of dollars.  Patricia S. Miller, 67, was charged with five counts of wire fraud by the U.S. Attorney for Massachusetts.  If convicted of the charges, Miller could face up to twenty years in federal prison for each count as well as up to a $250,000 fine.

Miller served as a financial advisor with several brokerage firms, most recently with Investors Capital Corp in McMurray, Pennsylvania.  Using her position as a financial advisor, Miller solicited potential investors for "investment clubs," such as "KS Invsestments" and "Buckharbor," that offered high rates of return through purported investments in fixed-income notes and other investments.  According to the indictment, investors entrusted millions of dollars towards these "investment clubs." 

However, authorities alleged that Miller did not use investor funds as promised, but rather misappropriated funds for her own use as part of a massive Ponzi scheme that may have dated back as far as the early 1990's.  According to Miller's FINRA Broker Check, she was terminated in May on grounds that she misappropriated customer funds, borrowed money from customers, and engaged in fraudulent investment activity.   The Report also disclosed that Miller was the subject of at least six pending customer complaints related to the alleged scheme.

Miller's Broker Check is below:

Broker Check


TelexFree Proof of Claim Deadline No Longer Valid, New Deadline Expected Soon

Ponzitracker has confirmed that victims of the alleged $1 billion TelexFree Ponzi/pyramid scheme no longer face an August 13, 2014 deadline to submit any claim for alleged losses, and that a new deadline will likely be set for late 2014.  TelexFree LLC, TelexFree, Inc., and TelexFree Financial Inc. (collectively, "TelexFree"), which initially filed bankruptcy in a Nevada Bankruptcy court, currently face allegations from state and federal securities regulators that their voice-over-internet-protocol ("VOIP") business was a massive Ponzi and pyramid scheme that took in hundreds of millions of dollars from U.S. investors alone.  The proceedings were subsequently transferred to a Massachusetts Bankruptcy court where civil and criminal proceedings are also pending, and an independent trustee was recently appointed.

An attorney for the independently-appointed trustee, Stephen Darr, has confirmed to Ponzitracker that the August 13, 2014 deadline established by the Nevada Bankruptcy court to file a Proof of Claim is no longer valid as a result of the transfer of the proceedings to Massachusetts.  Rule 3002 of the Federal Rules of Bankruptcy Procedure provides that a proof of claim is timely filed when done so within 90 days after the first date of the meeting of creditors known in Bankruptcy parlance as the "341 Meeting."  Shortly after TelexFree's April bankruptcy filing, a notice appeared on the court docket setting the 341 Meeting for May 15, 2014 and providing that the Proof of Claim filing deadline was 90 days after that date - resulting in a claim deadline of August 13, 2014.  

However, the originally-scheduled 341 Meeting was never held, as a Court ordered the transfer of the proceedings to a Massachusetts Bankruptcy court on May 6, 2014.  Recently, Ponzitracker spoke with an attorney for Trustee Stephen Darr, who confirmed that:

You can disregard the bar date set by the Bankruptcy Court in Nevada.

Thus, until the Court reschedules the 341 Meeting, the Proof of Claim deadline will not take effect.  

This change was also recently reflected on the official website maintained for TelexFree interested parties, with the Proof of Claim Form section modified to state that:

Claim Form (Modified Version Available Shortly)

Please note that a modified Proof of Claim Form specific to the TelexFree cases will be available in the near future. A Bar Date has not been set.

Thus, while the August 13, 2014 claim deadline is no longer valid, victims should still continue to gather appropriate documents that will allow them to submit an accurate claim, including bank documents showing their investment, documents from TelexFree or any promoter confirming their investment, and documents showing any funds received from TelexFree after their investment.  With the number of estimated victims likely to be in the tens of even hundreds of thousands, any discrepancy in a submitted Proof of Claim could potentially delay any eventual recovery.

Ponzitracker will report on when a new bar date is made public, and will provide a detailed instruction guide for understanding and completing the Proof of Claim form at an appropriate time.

Previous Ponzitracker coverage of TelexFree is here.


Convicted Ponzi Schemer Threatens To "Fry This Court" After Receiving 20-Year Sentence

Shortly after learning of his twenty-year prison sentence for operating a Ponzi scheme that duped more than 140 investors out of over $4.3 million, a Montana man stated that he "will fry this court" and threatened that the prosecuting county attorney "will pay."  Richard Reynolds received a 60-year sentence from District Judge Holly Brown, with 40 years of the sentence suspended, following his conviction on six felony charges in December 2013.  Reynolds' outbursts were reportedly followed by his daughter threatening the two co-prosecutors that "this is the beginning, not the end."  Authorities plan to report the threats to police.

Reynolds was arrested in July 2012 after being on the run for several months.  He had been charged with twenty felonies in Gallatin County District Court after a former employee alerted authorities over concerns over the legitimacy of his operation.  According to authorities, Reynolds and his wife, Lori, operated and managed eight corporations from 2008 to 2011 under the several companies, including United Consultant Investment Corporation ("UCIC"), Buffalo Exchange, and Buffalo Extension.  The two solicited investors for a purported foreign currency trading platform through Buffalo Extension and Buffalo Exchange, and in a gold investment opportunity through Buffalo Investment.  Importantly, none of these investments were approved or registered with any state securities regulator or the Securities and Exchange Commission ("SEC").  

Investors were provided with marketing materials and promised quarterly returns of 100 percent.  In one instance, Reynolds communicated with a promoter for a mining entity who provided him with offering documents after Reynolds offered to help raise money for the operation.  However, even after the promoter discovered that Reynolds had securities problems with Missouri and Montana authorities and ceased communication with Reynolds, it was later discovered that Reynolds still solicited several individuals to invest in the mining operation.  

Additionally, Reynolds also used his close relationship with area pastors to identify and solicit investors.  At least eight pastors introduced investors to Reynolds, and in return became employees of Reynolds and received 10% of all investor funds directed to Reynolds' operations  While the pastors thought that Reynolds was truly investing in the foreign currency and gold opportunities being promoted, they later became suspicious when Reynolds failed to meet investor principal redemptions and made promises he could not keep.  In total, Reynolds and his umbrella of entities raised approximately $5.4 million from over 140 investors in 21 states and six countries.

After the Montana Committee of Securities and Insurance was contacted by several former employees who had become suspicious of Reynolds, an investigation revealed that Reynolds and his wife did not make the gold and foreign currency investments they purported to make.  Instead, the two maintained thirty-one separate bank accounts at Bank of America and Wells Fargo, where they used at least $4.4 million of the $5.4 million they raised to live a lavish lifestyle and make Ponzi-style interest payments and principal redemptions.  Additionally, through investigative subpoenas served to E*Trade, the CSI learned that of a total of $725,000 of investor funds transferred in, approximately $314,015 was lost in speculative penny stock trading.  The CSI also learned that the Reynolds were a 49% owner in a pre-production movie being produced about an Indian heroine.  

After standing trial, Reynolds was convicted by a Montana jury of six felony charges, including two counts of fraudulent practices and single counts of theft, operating a Ponzi scheme, failure to register as a security salesperson and failure to register a security.  While Reynolds will be given credit for the approximately two years he has spent in custody, Montana law requires that he serve at least 25% of his sentence before he can be eligible for parole - meaning he will be in prison until at least mid-2017.  Such a timetable does not include any additional sentence based on the alleged threats.


Zeek Receiver Sues Former Attorneys For $100+ Million

The court-appointed receiver for the $600 million Zeek Rewards Ponzi scheme has filed suit against two well-known multi-level-marketing attorneys that provided legal services to the company, alleging the attorneys knew or should have known that the company "was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and/or a Ponzi scheme.  Kenneth D. Bell, the Receiver, named Howard N. Kaplan in one lawsuit and Kevin D. Grimes and Grimes' law firm, Grimes & Reese, P.L.L.C., in a second lawsuit.  Each suit contains legal a legal malpractice/negligence/breach of fiduciary duty claim, an aiding and abetting breach of fiduciary duty claim, and a claim for constructive trust, while the suit against Grimes also includes an unjust enrichment claim.  

The Securities and Exchange Commission filed civil fraud charges against RVG Venture Group, LLC d/b/a ZeekRewards ("Zeek") in August 2012, alleging that the company was operating a $600 million Pyramid and Ponzi scheme that was on the verge of collapse.  After Bell's appointment as Receiver, his subsequent investigation confirmed that Zeek's more-than 800,000 victims had likely lost between $500 million and $600 million.  Including money that authorities were able to seize following the charges and Bell's recovery efforts, more than $300 million has been recovered for the benefit of investors, and Bell has sought to make an interim distribution at the end of September.

As part of Bell's recovery efforts, he commenced "clawback" lawsuits against net winners that were fortunate enough to realize a profit off of their investment - a profit that was, in reality, simply the redistribution of funds belonging to other investors.  Additionally, Bell indicated throughout his quarterly status reports that he and his team continued to investigate:

claims against RVG's third-party advisors, vendors, and other service providers that knew or should have known of the inappropriate nature of RVG's activities and yet facilitated those activities for their own gain.

While Bell has explicitly said that these third parties included financial institutions, this is the first confirmation that Zeek's former legal advisors have also been under Bell's scrutiny.

The Lawsuits

The lawsuits allege that Kaplan and Grimes "played an indispensable role in the scheme."  Grimes is a well-known attorney in the multi-level-marketing arena, operating and touting his firm as the "premier law firm servicing the direct sales industry."  Kaplan is a tax attorney whose website states that "taxes are a necessary evil, [and] [p]aying too much in taxes is avoidable with good counsel." Both of the men are alleged to have served as counsel to Zeek beginning no later than January 2012 up to August 2012 when the Commission's enforcement action was filed.

Grimes, according to the complaint, despite allegedly knowing that Zeek was a Pyramid/Ponzi scheme that was selling unregistered securities, created a "compliance course" specifically designed to encourage investors and potential investors that completion of the course somehow bestowed an air of legitimacy to the scheme.  According to Bell, Zeek charged each affiliate $30 for the course - of which $5 was paid to Grimes.  Bell expands on his claim that Grimes knew Zeek was selling unregistered securities by pointing to an email purportedly authored by Grimes that stated, in part, 

I am still in the process of getting my arms around the program, but I have some SERIOUS concerns that it very likely meets the definition of an "investment contract."

If Zeek was, in fact, an investment contract (as tbe Commission alleged), it would constitute a security that was subject to federal and state securities laws, including registration requirements and exemptions.  According to Bell, Grimes discarded these concerns to profit from the creation and marketing of the compliance course.   

Bell also alleged that Grimes, a well-known figure in the multi-level marketing world, knowingly allowed Zeek to use his association with the company as an implicit endorsement of the company's legitimacy in order to attract more investors.  This not only included Grimes' participation in Zeek conference calls with investors, but the use of his name in marketing and promotional materials disseminated to prospective investors.  

While the allegations against Kaplan are not as thorough, Bell similarly alleged that Kaplan ignored that Zeek's compensation plan could only be classified as an investment.  As Zeek's "tax advisor," Kaplan appeared on multiple conference calls with investors to provide tax advice related to classification of their gains.  The suit also alleges that Kaplan allowed Zeek to use his association as an implicit endorsement of the legitimacy of the scheme, and that this served to prolong the scheme and the resulting financial losses.

The lawsuits assert multiple causes of action against Kaplan and Grime, seeking not only more than $100 million from each but also the award of punitive damages for their conduct.  

Previous Ponzitracker coverage of ZeekRewards is here.

The lawsuits are included below (special thanks to ASDUpdates):






1-main (1)


Page 1 ... 2 3 4 5 6 ... 161 Next 5 Entries »