Search
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
Social
Recent SEC Releases
Monday
Oct152012

California Woman Pleads Guilty to $2.2 Million Ponzi Scheme

A California woman admitted to masterminding a Ponzi scheme that bilked investors out of at least $2.2 million.  Celia Gallardo, 42, pled guilty to a single count of wire fraud stemming from her role in the scheme.  She was arrested earlier this year in July after a grand jury returned a sixteen-count indictment charging her with multiple counts of mail and wire fraud.  Gallardo faces up to twenty years in federal prison, as well as a fine of up to $250,000.  

According to authorities, Gallardo touted her real estate investment program to investors and promised above-average annual returns from Gallardo's purchase of condominiums.  From September 2007 to September 2008, dozens of investors contributed to the venture and received promissory notes from Gallardo memorializing thier investment.  However, rather than use investor funds for the stated purpose, Gallardo instead operated the classic Ponzi scheme, making Ponzi-style payments using funds from existing investors.  Additionally, Gallardo lived a lavish lifestyle, regularly taking expensive vacations and using ijnvestor funds to make mortgage payments.  In total, dozens of investors sustained losses exceeding $2 million.  

At her sentencing hearing, which has not yet been set, it is likely that Gallardo will be ordered to pay restitution to her defrauded victims.  

Thursday
Oct112012

Authorities Make Second Arrest in $60 Million Silver Ponzi Scheme

Authorities arrested a second individual in connection with a $60 million Ponzi scheme that ranks as one of the largest in South Carolina’s history.  Wallace Howell, 60, was indicted and later taken into custody yesterday on the charge that he conspired to commit mail fraud in a $60 million Ponzi scheme masterminded by Ronnie Wilson that purported to profit off silver trading.  Wilson was arrested earlier this year, and pleaded guilty in July to two counts of mail fraud. 

Beginning in 2004, Howell is believed to have been involved with Wilson’s scheme as a promoter, touting the venture to investors as a lucrative opportunity.  Indeed, according to the Independent Mail, a South Carolina newspaper, many investors submitted questionnaires indicating that they became aware of the scheme through Howell.  However, likely unbeknownst to investors, Howell would later receive millions of dollars from Wilson as payback for the referrals.  This included nearly $3.5 million in “profits” realized by Wilson in trading for two investor accounts.  According to the indictment, Howell “instructed” Wilson to transfer those profits into his own account, which Howell later withdrew.  If true, the allegations would also likely constitute violations of federal securities laws if Howell was not licensed to offer or sell securities or investment advisory services in South Carolina. 

A receiver has since been appointed to recover funds for victim’s of Wilson’s scheme.  Wilson faces up to twenty years in prison when he is sentenced. 

The Receiver’s website is here.

Tuesday
Oct092012

Iraqi Man Receives 57-Month Sentence for $2 Million Ponzi Scheme

An Iraqi and Michigan citizen was sentenced to serve fifty-seven months in prison for operating a Ponzi scheme that preyed on Middle Eastern investors and ultimately defrauded victims out of over $2 million. Ahmed Alabadi, 45, received the sentence after pleading guilty to a single charge of wire fraud in July 2012.  Along with the sentence, Alabadi was ordered to pay $2.3 million in restitution to his victims and serve three years of supervised release following completion of the sentence.  

According to authorities, Alabadi used his company, Fedek Group, Inc., to solicit investors who thought their funds would be used to support rebuilding efforts in post-war Iraq, fulfill contracts with the United Nations, and various other ventures.  Alabadi preyed on individuals of Middle Eastern descent, relying on cultural taboos forbidding dishonesty and self-dealing when dealing with tribal brothers and sisters.  Investors were promised annual returns of up to 100% and told that their funds would be safe.

However, Alabadi did not conduct legitimate investments, but instead ran a classic Ponzi scheme by using investor funds to pay returns to existing investors.  Following the collapse of the scheme, Alabadi was the subject of a civil lawsuit brought by over 100 investors, who subsequently obtained a $170 million default judgment.  Alabadi was arrested in February 2012 at a Detroit airport after being charged with bank fraud, attempted bank fraud and money laundering.  A federal judge later denied Alabadi's request for release following his arrest, citing his potential flight risk.

Monday
Oct082012

Ponzi Scheme 'Victim' Faces Prison For Tax Evasion After Failing To Report Profits

A California man faces up to five years in federal prison after admitting he failed to report millions of dollars in profits he received from a massive Ponzi scheme.  Donald Lopez, 63, pled guilty to a single count of willful income tax evasion related to nearly $3.5 million in profits received from Matthew LaMadrid's massive Ponzi scheme that were not reported to the Internal Revenue Service.  Lopez faces up to five years in prison, as well as a maximum fine of $250,000.  

LaMadrid operated the Plus Money Return Premium Funds from 2004 to 2008, which advertised above-average returns through purported covered-call stock option trading.  However, rather than engage in legitimate trading, LaMadrid operated a Ponzi scheme, using investor funds to pay returns to ther investors and misappropriating investor funds to support a lavish lifestyle that included luxury cars, art, and gambling.  In November 2007, as the scheme was on the throes of collapse, LaMadrid caused $10 million to be wired to an account controlled by Lopez.  Lopez kept approximately $3.94 million of that amount for himself, of which $3.42 million should have been reported as taxable income to the IRS. As a result, the IRS was deprived of $1.3 million in revenue.  

La Madrid received a ten-year prison sentence for his scheme last July.  He was also ordered to pay $23.5 million in restitution to defrauded investors.  

Thursday
Oct042012

Connecticut Man Receives 8-Year Sentence for $6 Million Ponzi Scheme

A Connecticut man was sentenced to serve more than eight years in prison after pleading guilty to operating a Pomzi scheme that duped more than 50 investors out of $6 million.  Gregory Viola, 60, had been arrested in August 2011 and charged with multiple counts of mail fraud.  United States District Judge Vanessa L. Bryant handed down the sentence to Viola and also ordered him to pay nearly $7 million in restitution to his defrauded victims.  Viola's financial status and ability to satisfy the restitution order remains unknown.

According to authorities, Viola provided tax advice for various companies from 1989 to 2006 while also serving as an unregistered investment advisor.  Beginning in 2007, Viola began operating an investment advisory business, purporting to earn lucrative returns for investors.  Viola provided investors with fictitious account statements showing steady returns, with total assets under management approaching $10 million at one point.  

However, Viola failed to achieve the advertised returns, instead operating  the classic Ponzi scheme by using new investor funds to pay returns to existing investors.  In addition to paying out $2.5 million to investors as fictitious returns, Viola misappropriated investor funds to cover his personal expenses, including jewelry purchases, country club memberships and the payment of his mortgage.  

In total, the scheme cost investors more than $6 million.