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
Friday
Mar152013

Ponzi Scheme Victim Arrested After Allegedly Attacking Schemer, Threatening to Cut Off Fingers and Toes

A Florida man is in jail after authorities say he attacked the woman who conned him through a multi-million dollar Ponzi scheme.  Adam Pollock, the owner of Kokopelli's Gym and Fitness Center in Longwood, Florida, was arrested after an encounter at his gym with Tina Mangiardi, a former model who admitted earlier this week to masterminding a Ponzi scheme that duped investors out of millions of dollars.  Pollock is being held without bond on multiple charges, including felony battery by strangulation, kidnapping/false imprisonment, aggravated assault with a deadly weapon, and battery.  Ironically, if convicted, it is possible that Pollock's sentence could exceed that handed down to Mangiardi.

News broke last week that Mangiardi would plead guilty to charges of mail and wire fraud in a plea agreement with federal prosecutors.  Several days later, Mangiardi appeared at Pollock's gym, which advertises itself as a "Thai Kickboxing" gym specializing in "No Holds Barred Fighting".  According to Mangiardi, she showed up to pay a debt to Pollock.  However, once she entered the gym, she alleged that Pollock put on a pair of black gloves and brandished a knife, threatening to cut off her fingers and toes as collateral for his investment.  Pollock also admitted to pushing Mangiardi, adding that he also may have slapped her.  Mangiardi fled, as evidenced by surveillance video captured by WFTV 9:

Mangiardi, a former model and single mother, solicited potential investors to invest in "bid bonds" for various Orlando-area projects, including restaurant chains, local hospitals, and even Disney.  A bid bond, which is not considered investment grade, are used to guarantee the financial viability and amount of a bid given by a construction company, and are typically issued by insurers.  In return for this authentication, the contractor usually must pay a small fee to the insurance company.  Mangiardi explained that she could double or triple investors' money within weeks, and lured investors by stressing her strong Christian faith and explaining that her gender would allow her to qualify as a minority in bidding for government contracts.  Based on these promises, Mangiardi raised millions of dollars from at least 40 Orlando-area victims.  Many of these victims, according to authorities, were male business associates.  

However, as admitted last week, this was nothing more than a Ponzi scheme, with Mangiardi using new investor funds to pay older investors.   

Thursday
Mar142013

Wife of Suspected Ponzi Schemer Charged For Lying to Investigators

The wife of a suspected Ponzi schemer on the lam is facing criminal charges in Michigan after authorities alleged that she provided misleading information to investigators about the whereabouts of her husband.  M. Viktoria Wilson, 24, was charged with a single count of lying to a police officer during the investigation of a crime, which carries a four-year maximum prison sentence.  Authorities allege she lied to investigators during a January 8, 2013 interview in which authorities were attempting to determine the location of her husband, Joel Wilson, who has been charged with running a real estate Ponzi scheme that raised nearly $7 million from over 100 investors.  Joel Wilson, who is currently believed to be living in Germany, faces numerous felony charges in connection with the scheme.

According to authorities, Joel Wilson operated Diversified Group Partnership Management, LLC and American Realty Funds Corporation.  Beginning in 2009, investors were solicited to invest with Wilson's companies, with Wilson allegedly promising annual returns of nearly 10% that were obtained through the purchase, renovation, and resale of real estate in Bay City, Michigan. Investors were told that they would be repaid with the payments made by the purchasers of the renovated houses.  In all, approximately 120 investors entrusted Wilson and Diversified Group with nearly $7 million.  

However, authorities allege that Wilson's real estate businesses simply did not raise enough money to pay the returns promised to investors.  Wilson did not disclose these facts to investors, and instead used new investor funds to pay these purported "profits".  Additionally, over $500,000 was used to support Wilson's lavish lifestyle, including:

  • $75,000 to purchase a rival securities broker;
  • $35,000 on his wife’s business, 
  • $7,914 to buy Detroit Red Wings tickets, 
  • $13,160 to purchase tickets and sponsor the Saginaw Sting, a professional indoor football team, and 
  • $46,780 on travel.

In January 2013, Wilson was charged with multiple felonies, including racketeering, selling unregistered securities, larceny, fraudulent sale of securities, and conversion.  If convicted of all charges, Wilson could face decades in prison.  However, before the charges were unveiled, Wilson had moved to Germany, where he remains today.  He has remained defiant in maintaining his innocence, including his active presence on online newspaper comment boards taunting authorities.  While authorities have suggested that efforts are underway for Wilson to return to the United States to face the charges, Wilson has indicated he plans to remain in Germany, as evidenced by this quote attributed to him:

I guess now is as good a time as any to let the world know I will not be returning from Germany.  I have developed an intense and irreconciable hatred for what America has become.  Fascists run rampant and unchecked.  An opiated populous continues to vote away more and more freedom.  Freedom will die in my lifetime.  I'm going to do what I can from here to try and wake  up as many people as I can and try and prepare as best as I can for the long dark night that is coming.  If my words hold weight, begin your own preparations.  A 30 year old man has just been turned into a slave.  Sure there are no chains, but I opened an account in Germany two weeks ago.  The US government knew about it.  They are not made of iron, but these chains are just as real.

A copy of the SEC's complaint is here.

Tuesday
Mar122013

10-Year Sentence For Florida Man in $32.5 Million Ponzi Scheme

A North Carolina federal judge handed down a 10-year prison sentence to a Florida man for his participation in a commodities and foreign exchange Ponzi scheme that duped investors out of nearly $30 million.  Gary D. Martin, of St. Augustine, Florida, received the sentence from United States District Judge Robert Conrad for his role in soliciting tens of millions of dollars from investors that was subsequently funneled into a massive Ponzi scheme.  Martin pled guilty to one count of money laundering conspiracy approximately a year ago, and received the maximum 10-year term available under the statute.  Along with his sentence, he was also ordered to pay $28.5 million in restitution to scheme victims.

According to authorities, Sidney Stanton Hanson ("Hanson") operated a network of entities, including Queen Shoals, LLC ("Queen Shoals"), which purported to be in the forex and commodities trading business. Hanson, who pled guilty earlier this year to charges of securities fraud, mail fraud, and money laundering, did not disclose to investors the use of more than 30 "consultants" who were paid referral fees in return for funnelling customer funds to Queen Shoals.   Martin and his wife, Brenda (the "Martins"), acted as so-called "consultants" who, after forming Queen Shoals Consultants, LLC ("QSC"), solicited potential investors by telling them that QSC had over 20 years of experience in financial services, and that Martin had vast experience dealing with commodities and foreign currencies. Investors were promised annual returns ranging from eight to twenty-four percent, along with an additional 1% to investors who rolled over their IRA balances.  

Through QSC, the Martins raised over $20 million from investors through in-person solicitations, written materials, and a website.  All funds raised by the Martins were then turned over to Hanson, who paid the Martins at least $1.44 million in undisclosed referral fees.  

However, Queen Shoals was far from a legitimate operation.  Instead, Hanson masterminded an elaborate Ponzi scheme that incurred massive losses in the minimal forex trading that actually did occur.  The remainder of the funds taken in from investors were used to pay quarterly interest payments to existing investors, referral fees to so-called "consultants", and to sustain Hanson's lavish lifestyle.  In April 2011, Hanson was sentenced to twenty-two years for his role in the scheme and also ordered to pay more than $33 million in restitution.  

Martin and his wife previously agreed to settle an action brought by the U.S. Commodity Futures Trading Commission by agreeing to permanent bans from the commodities trading industry, as well as agreeing to make full restitution to defrauded investors.  Between Hanson and the Martins, over $9 million has been paid into the Court registry for eventual distribution to victims.

A copy of CFTC and SEC complaint filed against the Martins are here and here.

Sunday
Mar102013

After Two Days of Trial, Florida Man Agrees to Plead Guilty to $10 Million Ponzi Scheme

In an unlikely turn of events, a Florida man decided to change his plea from 'not guilty' to 'guilty' on the third day of his trial, effectively ending the trial.  George Elia, 69, made his decision after hearing a morning of testimony from a number of his victims and several more scheduled to take the stand during the afternoon.  Elia agreed to plead guilty to all ten charges he was facing, including nine counts of wire fraud that each carry a maximum sentence of twenty years in prison.  

Elia was accused of targeting members of the south Florida gay community Wilton Manors, telling them that he was an established day trader who could achieve quarterly returns of 20% for investors. From March 2005 to January 2012, Elia raised more than $11 million from investors for various entities he controlled, including Investor Funding Group and a series of Vision Equity Funds.  

However, rather than use the entirety of investor funds for their promised purpose, Elia misappropriated large amounts of investor funds, transferring money to other companies he controlled and paying personal expenses such as mortgage and car payments.  In the marginal amount of trading actually conducted, Elia did not achieve the advertised lucrative gains, but instead incurred losses or only minimal gains.  

Elia was arrested in March after returning from "vacation" in Cyprus - a country known for its lack of extradition treaties with the United States.  After plea negotiations that would have had Elia plead to a single count of wire fraud, authorities unsealed a subsequent indictment in September that levied eight more charges of wire fraud.  

Elia is scheduled to be sentenced on May 14, 2013.  Elia's attorney indicated that they will be disputing the amount of investor losses, which plays a crucial role in the recommended sentencing range.  Elia could potentially face a life sentence. 

A copy of the SEC's complaint against Elia is here

Sunday
Mar102013

Authorities Confiscate 60 Pipe Bombs From Suspected Ponzi Schemer

Authorities conducting a search of a storage locker belonging to a Pennsylvania man suspected of masterminding a $2 million investment fraud made an unlikely find when they discovered over 60 foot-long pipe bombs.  The turn of events is the latest in twists involving Istvan Merchenthaler, a native of Hungary currently residing in Chester County, Pennsylvania, who currently faces charges that his prepaid phone-card venture was an elaborate Ponzi scheme.  Merchenthaler was charged last year with four counts of wire fraud, one count of aggravated identity theft and two counts of money laundering.  A superseding indictment unsealed last week contained several additional charges, including an additional count of aggravated identity theft, two additional counts of money laundering, two counts of filing false tax returns, and two counts of interstate transportation of stolen property.

Merchenthaler operated PhoneCard USA from at least May 2006 through February 2013, telling potential investors that he was a "premier distribution source" for prepaid phone cards and cell phones with "lucrative" contracts with national retailers like WalMart and 7-Eleven.  Investors were offered "generous" returns in exchange for investing, and Merchenthaler raised approximately $2 million from over 200 investors.  

However, in reality, Merchenthaler had none of the "lucrative" contracts he boasted about, nor did he have relationships with high-ranking executives at WalMart or 7-Eleven.  Rather, he ran a classic Ponzi scheme, using investor funds for a variety of unauthorized uses, including paying 'returns' to investors and living a lavish lifestyle that included the purchase of jewelry, firearms, and luxury vehicles.  

Merchenthaler's criminal indictment was not his first run-in with the law.  Indeed, in 2004, he was arrested in Sao Paolo, Brazil on charges of drug trafficking after he was caught with 20 kilograms of cocaine.  He was released in 2005 (and his lawyer was later disbarred after Merchenthaler accused him of defrauding him).  Even after his indictment, Merchenthaler ran into more problems after he stole two cars, including a 2012 Jeep Grand Cherokee.  He was arrested again, and faced two more charges of grand theft.  

In addition to the pipe bombs discovered in the Pennsylvania storage locker, one report also links Merchenthaler to the discovery of explosive devices in a Monkey Junction, North Carolina rental.  As it isillegal to possess and manufacture explosive devices such as pipe bombs, Merchenthaler will likely face additional charges.  It is unknown as to why Merchenthaler was in possession of the pipe bombs or their intended use.