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
Jul022013

California Woman Receives 5-Year Sentence for $2 Million Real Estate Ponzi Scheme

A California woman who ran a multi-million dollar real estate Ponzi scheme has been sentenced to serve five years in prison.  Celia Gallardo, 42, received the sentence after pleading guilty to a single charge of wire fraud last October.  While prosecutors recommended a sentence of 41 months based on federal sentencing guidelines, U.S. Judge Doug Pregerson opted for a higher sentence.  Gallardo was also ordered to pay full restitution of $2,389,400 to her victims.

From September 2007 to September 2008, Gallardo soliicited investors through her companies Gold Feather Realty and Gold Credit Investment, pitching a real estate program that promised exorbitant returns through the purchase of unfinished condominiums in Florida and Tennessee for 'pennies on the dollar.'  Some investors were even told that Gallardo could triple their money within ninety days.  In total, Gallardo raised several million dollars from victims.

However, instead of investing the vast majority of investor funds, Gallardo used the funds to prop up a lavish lifestyle that included paying her mortgage, foreign luxury travel, and cash withdrawals.  Additionally, Gallardo used investor funds to make interest payments to existing investors - a classic hallmark of a Ponzi scheme.  

While the vast majority of Ponzi schemes are committed by men, a growing number have been committed by women, including several schemes with sizeable losses.  More information on Ponzi schemes committed by women is available here.

Tuesday
Jul022013

Judge Doubles Ponzi Schemer's Sentence For Failure to Pay Pre-Sentencing Restitution

“What’s clear is he isn’t going to get 2 to 6 years. He didn’t pay back one cent.”

- Manhattan Supreme Court Judge Charles Solomon.

A convicted Ponzi schemer who agreed to pay pre-sentencing restitution to his victims in exchange for a reduced prison term landed in hot water with a New York State Judge last week after he failed to pay a single cent of the promised restitution.  Steven Bingaman, 57, had previously pled guilty to 23 counts of grand larceny, money laundering, forgery and securities fraud before Manhattan Supreme Court Judge Charles Solomon.  In an agreement with prosecutors, Bingaman agreed to pay over $1 million in pre-sentencing restitution to his victims in return for a reduced prison term of two-to-six years.  However, after it was revealed at sentencing that not 'one penny' of restitution had been paid, Judge Solomon delayed sentencing and later doubled Bingaman's punishment to a four-to-twelve year sentence.

Bingaman solicited investors through a variety of ventures, including a telecommunications company called Appleby Telecommunications LLC and raising funds for an unnamed investment project.  Investors were promised above-average returns and told that their investment would be 'liquid' and kept in escrow and available for refund on short notice.  In total, Bingaman raised more than $1.5 million from investors.

However, rather than investing investor funds or attempting to obtain financing, Bingaman misappropriated the funds for his own use to support a lavish lifestyle that included the payment of country club dues and mortgages on multiple homes.  Additionally, Bingaman used investor funds to make Ponzi-like payments to other investors who thought they were receiving legitimate returns from the advertised investments.  

Of note, Bingaman had previously lashed out at prosecutors after he was indicted, calling the accusations "salacious" and saying "The New York district attorney has terrorized my family and me for six months."

Tuesday
Jul022013

'Junior Bernie Madoff' Gets 10-Year Sentence for $10 Million Ponzi Scheme

A Florida man thought to be one of the youngest Ponzi schemers in history was sentenced to serve ten years in prison for masterminding an elaborate Ponzi scheme that netted him an Italian girlfriend, a house in Rome, and even a role in an Italian movie.  Donald R. French, 26, received the sentence after previously pleading guilty to a single count of conspiracy to commit mail and wire fraud, which carried a possible maximum term of twenty years in prison.  U.S. District Judge Kenneth Ryskamp, who delivered the sentence, stated he found Ponzi schemes to be 'outrageous,' and rejected French's attorney's request to sentence French to the lower end of the 8-to-10 year range under federal sentencing guidelines.  In delivering a sentence of 121 months, Judge Ryskamp questioned whether French was truly remorseful and branded him "just a junior Bernie Madoff."  

Beginning in 2008, when he was just 21, French founded D3 Capital Management LLC ("D3"), appealing to high net-worth investors by 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 foreign currency, solar energy, and 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, 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.  Additionally, French invested no more than 15% of investor funds in legitimate investments, and admitted that he later withdrew the majority of the money he put in those investments.  

French attributed his ability to convince investors to part with their hard-earned money to his "gift of gab." Using investor 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 to Las Vegas, where he racked up exorbitant gambling debts that were later satisfied with 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.  

French pled guilty to bad check charges in Nevada last summer, which landed him a 30-month prison sentence.  

Friday
Jun282013

Introducing BriefCache by Ponzitracker

 Two years ago, Ponzitracker was launched with a simple goal in mind - to serve as a comprehensive resource on the proliferation of Ponzi schemes.  This has included regular reporting on schemes across the world, as well as other educational information regardless of whether the audience was a victim, litigant, or lawyer. (This audience apparently also included perpetrators, as one recent decision from the Seventh Circuit Court of Appeals showed.)  This information has remained free of charge, and free of advertisements or other distractions.  Since its launch, Ponzitracker has strived to stay at the forefront of Ponzi litigation, and in doing so has been recognized as a Top 25 Business Blog by Lexis Nexis and is routinely ranked as one of the top blogs by Avvo.  Today, it will go one step further by introducing Briefcache.

With a steadily-growing library of 500+ articles, the thought recently occurred as to how Ponzitracker could function as a resource not only for the casual reader, but for practitioners in the rapidly growing niche industry of Ponzi litigation.  As hundreds of Ponzi schemes have been uncovered in the past several years, a strengthening legal jurisprudence is emerging.  However, much of this information is not easily available.

Today, Ponzitracker will launch Briefcache, which is the beginning of efforts to make the burgeoning jurisprudence of Ponzi litigation available to all.  Briefcache features thousands of legal documents categorized by topic that have been filed, litigated, and decided in Ponzi scheme receivership and bankruptcy cases.  From the sale of airplanes to status reports to recovering land to returning funds to victims, these documents are all now available after months of preparation and indexing.  

Best of all, Briefcache will be free of charge.  While it will remain a work in progress, it is my sincere hope that it may function as a valuable and worthwhile resource to whatever audience may decide to utilize it.  

A link to Briefcache is here.

Questions, comments, or criticism are welcome at inquiries@ponzitracker.com

 

Wednesday
Jun262013

Former Middle School Teacher Charged in $1 Million Ponzi Scheme

A former middle school teacher has been charged with fraud after authorities accused him of operating a Ponzi scheme that took in more than $1 million from friends and family, including school district colleagues. Federal authorities announced that Carl David Wright, 52, had agreed to plead guilty to a single count of mail fraud in connection with the scheme, which carries a maximum possible prison term of twenty years.  In a parallel action, the Commodity Futures Trading Commission ("CFTC") announced it was also filing civil charges against Wright.  

Wright worked as a schoolteacher at Lincolnton Middle School in Cherryville, North Carolina since 1986, where he taught career and technical education, and also worked as a painter on the side.  Sometime in 2008, he opened a futures trading account, and began soliciting family and friends to invest in a commodity pool he operated named Commodity Investment Group ("CIG").  Potential investors were promised short-term returns ranging from 10% to 30%, and understood that their funds would be used as loans for Wright's painting business, for the purchase and resale of gas stations, or to trade commodities such as grain futures, crude oil futures, or currency futures.  At least some of these investors were provided with a Special Renewable Note Agreement (the "Note"), which often carried a 2-6 month term and a fixed interest rate.  In total, Wright raised more than $1 million from investors.

However, rather than use investor funds as promised, Wright misappropriated funds and operated the classic Ponzi scheme by using incoming investor funds to pay returns to existing investors.  Of the approximately $60,000 that was actually used to trade commodity futures, Wright suffered nearly 100% trading losses.  Instead, the majority of funds was used to pay back investors, and Wright also misappropriated approximately $300,000 for his own personal use.  

After Wright abruptly retired from the school district on March 15, 2013, an investigation by the U.S. Postal Service and North Carolina securities regulators resulted in Wright's confession to operating the scheme.  At the time of the investigation, less than $1,000 of investor funds remained.

A sentencing hearing has not yet been scheduled.

A copy of the CFTC complaint is here.