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
Tuesday
Oct232012

Accused Ponzi Schemer Kidnapped By Victims In Attempt To Recoup Investment

Apparently not content to let the justice system run its course, three Indian men decided to take matters into their own hands when they kidnapped a man suspected of a multi-million dollar Ponzi with the goal of forcing the man to return their investment.  Asif Hussain Siddique, Ayub Siddique, and Iqbal Sheikh (the "Trio") face criminal charges in connection with the failed attempt, and police remain on the lookout for two more accomplices who remain fugitives.  The accused Ponzi schemer, Imtiyaz Saiyad, is said to have defrauded over 12,000 investors across India in an investment operation that purportedly promised 120% annual returns.  Saiyad has denied involvement.

Indian authorities became involved last year after several investors contacted authorities with suspicions about Saiyad's investment venture.  Known as Imtsons Ltd., investors were allegedly solicited with the promise of annual returns exceeding 120%.  Saiyad was subsequently arrested, along with six 'sub-agents', on charges of duping.   According to authorities, Saiyad's operation involved over 12,000 investors that contributed over $10 million to Imtsons on the promise of lucrative returns.  However, according to Saiyad, he never promised investors the purported 120% returns; instead, he blamed his 'sub-agents' for luring investors into their own schemes under the name of Imtsons.  Saiyad was ultimately released by authorities on the condition that he would make restitution to investors by the end of October 2012.

The Trio had invested over $300,000 with Saiyad.  When they learned of Saiyad's arrangement with authorities, they devised a ruse to kidnap Saiyad, luring him to a city called Lucknow with a story that a Lucknow-based investor wanted to invest over $10 million with Imtsons.  However, no such high-rolling investor existed.  Instead, the Trio kidnapped Saiyad at gunpoint upon arriving in Lucknow, keeping him in a house under armed guard and demanding that he repay the funds lost by the Trio.  Saiyad was forced to call family members to ask for cash or gold jewelry to satisfy the Trio's demands.  Saiyad was able to turn over nearly $10,000.

However, unbeknownst to his kidnappers, Saiyad had managed to send out a text message to a family member informing them of his predicament.  After consulting with police, the family devised a plan to have the kidnappers believe that an Indian businessman was ready to invest $100,000, but required Saiyad to travel to his state to sign papers evidencing the investment.  When Saiyad arrived at the agreed-upon location with several of his kidnappers in trail, police arrested three while two managed to escape.  

It remains unclear as to the severity of the charges lodged against the kidnappers.

Sunday
Oct212012

Former Attorney Pleads Guilty To $7.8 Million Ponzi Scheme

A Houston man admitted that he operated a Ponzi scheme that defrauded victims out of at least $7.8 million.  Billy Frank Davis, 67, a former attorney, attracted potential investors by claiming he was a successful real estate investor.  Pleading guilty last week to a single count of wire fraud, Davis admitted that the operation was nothing more than a Ponzi scheme.  Wire fraud carries a maximum possible sentence of twenty years in prison, as well as a $250,000 criminal penalty.

According to the Federal Bureau of Investigation, Davis operated the scheme for over a decade, telling investors he could generate high returns through a variety of real estate investments.  Many of these investors knew Davis through his contacts at several prominent Houston golf courses, including Champions Golf Usa.  Some knew that Davis had previously been disbarred during a previous unrelated incident, but were reassured by his standing within the golf community and his representations to investors.  In total, more than 20 investors contributed millions of dollars.  However, While Davis did engage in a small amount of legitimate investment activity, he admitted that the majority of investor funds were not used as advertised.  Instead, Davis used investor funds to make Ponzi-style payments and support his lavish lifestyle.  

Davis is scheduled to be sentenced before United States District Court Judge David Hittner on January 11, 2013.  Coincidentally, Judge Hittner is the same judge that recently sentenced R. Allen Stanford to serve 110 years in federal prison for his $7 billion Ponzi scheme.  Davis has also agreed to pay restitution to his victims.  

Friday
Oct192012

Mysterious One-Eyed Man Implicated in $6 Million ".44 Magnum" Ponzi Scheme

According to Lunn, Perello told Lunn in the fall of 2010 that he named Dresdner’s program the Magnum Program because “when people found out they’d been ripped off, they would buy a .44 Magnum and shoot themselves in the head.” 

In a bizarre Ponzi scheme purportedly based in Chicago involving a mysterious one-eyed man and 4,445% returns, the Securities and Exchange Commission ("SEC") charged three individuals with masterminding an investment fraud that scammed investors out of at least $6 million.  Geoffrey H. Lunn ("Lunn"), 56, Darlene A. Bishop ("Bishop"), 40, and Vincent G. Curry ("Curry") (collectively, the "Trio"), 42, were charged with multiple violations of federal securities law in connection with the scheme, which used the name of a prestigious German bank to lull investors.  The SEC is seeking injunctive relief, disgorgement of ill-gotten gains, pre-judgment interest, and civil monetary penalties.

According to the SEC's complaint, Lunn created Dresdner Financial ("Dresdner") in February 2010, claiming it had extensive connections with top world banking institutions and was a leader in commercial financing and bank instruments.  The operation provided a phone number and physical address in Chicago, Illinois. Lunn then hired Bishop and Curry to serve as "affiliates" to market and sell investments on behalf of Dresdner.  For their efforts, Bishop and Curry were promised commissions commensurate with their sales.

The primary investment marketed by Dresdner was the .44 Magnum Leveraged Financing Program (the "Magnum Program").  According to Dresdner, investors who initially contributed $44,000 could expect a 100% guaranteed return of $2 million within ten to twelve banking days - a 4,445% return.  Investors were told that such a high rate of return was possible through the leasing and "simultaneous monetization" of bank instruments.  Despite the exorbitant rate of return offered, at least seventy investors contributed nearly $6 million in the 1-year period from February 2010 to February 2011.

Not surprisingly, investors did not receive their promised 4,445% return.  Instead, Lunn cited numerous delays for payments to affiliates and investors, including that the insurance company was behind schedule, banks or governments had placed a hold on the funds, or that Dresdner was worked through tax reporting issues.  To compensate investors for the delays, Lunn promised even more money.  

In reality, Lunn did not use any investor funds as promised.  Instead, during a deposition before the SEC, Lunn stated that "it was a con, basically," and admitted to never leasing or monetizing any bank instruments.  Instead, Lunn misappropriated investor funds for a variety of unauthorized purposes, including the payment of nearly $1 million to three Las Vegas call girls so they could have "a better type of life."  Additionally, Lunn paid over $600,000 to Bishop and Curry in commissions.  

When asked to explain over $1 million in cash withdrawals, Lunn told the SEC that an individual named Robert Perello ("Perello") had created Dresdner and the Magnum Program and had threatened to kill Lunn if he did not participate in the scheme.  According to Lunn, the cash he withdrew from the scheme was given to Perello.  Lunn claimed to be the only individual at Dresdner to have met Perello, and told SEC officials that Perello could be easily identified, as he only has one eye.  To date, the SEC has been unable to identify or locate Perello.

The action was filed in a Colorado federal court, where Lunn resides.  

A copy of the SEC complaint is here.

Thursday
Oct182012

25-Year Old Florida Man Charged With $10 Million Ponzi Scheme

In what is believed to be one of the youngest Americans charged with running a Ponzi scheme, Florida authorities have charged a Boca Raton man with orchestrating a Ponzi scheme that allegedly defrauded investors out of $10 million.  Donald R. French Jr. was recently arraigned on a charge of wire fraud after originally being detained in South Africa and deported to Las Vegas to face charges he passed $750,000 in bogus checks.  After entering a guilty plea to those charges, he arrived in Boca Raton last week. Charged with devising the scheme when he was just 21 years old, French now faces up to twenty years in federal prison for the wire fraud charge.

According to authorities, French incorporated D3 Capital Management LLC ("D3"), listing an office address in the ritzy Mizner Park area of Boca Raton, Florida.  Holding itself out as a 'premier provider of global investment management' with offices in Hong Kong and Rome, D3 promised investors lucrative annual returns of fifty percent or more through investments in commodities such as emeralds.  In total, D3 managed to amass over $10 million from over 20 investors.

However, as French later confessed to an FBI agent in July, the lucrative returns were nothing more than an elaborate Ponzi scheme that existed solely to support a lavish lifestyle.  This included living abroad in Rome for five years, frequent foreign travel, and extensive gambling losses.  Indeed, the Mizner Park address listed as the principal office address for D3 turned out to be nothing more than a phone number and an address.  According to that FBI agent, French attributed his ability to convince investors to part with their hard-earned money to his "gift of gab."   Rather than invest these funds, French accumulated more than $1 million in debit card purchases and withdrew more than $1 million in cash while using investor funds as his personal piggy bank.  

French was arrested in South Africa earlier this summer and subsequently deported to Las Vegas to face charges that he passed nearly $1 million in phony checks.  According to authorities, French was a frequent visitor in Las Vegas, where he accumulated exorbitant gambling debts that were satisfied using investor funds.  However, even after investor funds were depleted, French continued to frequent Las Vegas, where he racked up $600,000 in charges at popular casino The Cosmopolitan from April 2011 to June 2011.  Earlier this summer, French agreed to plead guilty to passing a bad check and accept a prison sentence of no more than 30 months.  

Now facing federal prosecution in Florida, French has claimed indigent status and enlisted the support of the Federal Public Defender's Office.  According to court records, French is scheduled to be arraigned on November 2, 2012.  

Tuesday
Oct162012

Authorities Charge Three With $28 Million Ponzi Scheme That Targeted Retirees

Authorities charged three men with operating a massive Ponzi scheme that targeted retirees and raked in nearly $30 million.  Robert C. Pribilski, 54, Mahmut Erhan Durmaz, 42, and John T. Burns III, 53, were each charged with multiple criminal fraud counts, with Pribilski and Durmaz each charged with five counts of wire fraud and four counts of mail fraud, and Burns charged with three counts of wire fraud and three counts of mail fraud.  Both wire fraud and mail fraud carry a maximum sentence of twenty years in prison, as well as criminal monetary penalties.  Additionally, the government is seeking $28 million in forfeiture from the three defendants.  While Pribilski and Burns are scheduled to be arraigned later this week, Durmaz fled the United States several years ago and is believed to be hiding in Turkey.

According to authorities, the three men were associated with USA Retirement Management Services ("USARMS"), which solicited retirees through mass-mailings to estate planning seminars held at country clubs and banquet halls.  The men portrayed themselves as educated and experienced in foreign investments that were specifically tailored to senior needs.  Investors were pitched "Turkish Eurobonds" through the purchase of USARMS promissory notes that yielded lucrative annual returns ranging from 8 to 11 percent.  Based on these representations, over 100 investors contributed more than $20 million to USARMS.

However, authorities allege that many of these representations were simply untrue.  For instance, USARMS did not actually invest these funds in Turkish Eurobonds.  Instead, investor funds were used to make over $7 million in Ponzi-style payments to existing investors under the guise of profits from successful trading.  Additionally, the men misappropriated nearly $5 million in investor funds to support a lavish lifestyle that included expensive cars, homes, vacations, and even pornography.  Durmaz even purchased a stamp collection and funded the purchase of the cyrogenic preservation of umbilical cord stem cells.  

Moreover, while investors were told that Durmaz had earned a Masters in Business Administration and was a Certified Senior Advisor, neither of these representations were true.  Finally, nearly $14 million was transferred to relatives and related companies in Turkey.  When the scheme was uncovered in 2010 by the Securities and Exchange Commission, only $900,000 remained in financial accounts controlled by USARMS. 

In addition to the newly-unveiled criminal charges, the SEC instituted a civil enforcement action against the three in 2010, seeking disgorgement of all ill-gotten gains and civil monetary penalties.  

A copy of the SEC's complaint is here.