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

Lawyer's Fight to Recover Ponzi Scheme Losses Results in Bankruptcy, Suspension of Law License

"I expose a Ponzi scheme, I've turned over and worked with the FBI to find all kinds of hidden money, I'm probably single-handedly responsible for the Hoffmans being indicted,"
- John O. Murrin
The Minnesota Supreme Court suspended a semi-retired Twin Cities lawyer's law license for six months, determining that he filed multiple frivolous lawsuits in an ill-fated effort to recover $600,000 in losses he suffered from a real estate Ponzi scheme.  John O. Murrin, III, who also founded the referral service DIAL L-A-W-Y-E-R-S, headed a successful law practice for several decades.  However, after a hefty investment in a real estate speculation firm turned out to be a Ponzi scheme, Murrin played an instrumental role in exposing the scheme, working with the Federal Bureau of Investigation and helping to obtain the convictions of several of the scheme principals.  However, it was his quest to seek civil relief from those he deemed responsible that eventually culminated with a voluntary bankruptcy filing, and now, a suspension of his license to practice law.

In 2004, Murrin decided to invest $600,000 into Avidigm Capital Group, Inc. ("Avidigm"), which advertised itself as speculating in real estate through "foreclosure prevention."  Avidigm promised to pay Murrin $11,000 monthly interest payments in return for his investment.  In the beginning, Avidigm made interest payments as promised.  However, Murrin became alarmed when the flow of interest payments stopped in 2006. Additionally, the security interest granted to Murrin that supposedly was worth $900,000 turned out to be worth merely $200.  

Murrin then approached the FBI with his suspicious, and over the next few years, played a key role in a federal investigation of Avidigm that resulted in the filing of criminal charges against Avidigm CEO Steve Mattson and Texas couple Jim and Teresa Hoffman, who allegedly operated Avidigm behind the scenes.  Mattson was sentenced to a year in prison, and the Hoffmans are scheduled to be sentenced in November for mortgage fraud convictions.  

Not content to stop there, Murrin then began the sequence of events that would eventually leave him bankrupt and result in his law license being suspended.  According to the Minneapolis Star Tribune, which provides a detailed account of Murrin's travails, Murrin filed a 131-page lawsuit in a Minnesota state court seeking damages against nearly 50 defendants for their alleged roles in the scheme.  Judge Denise Reilly, finding that the lawsuit was so "confusing as to be comprehensible," dismissed the suit several times while giving Murrin a chance to amend the suit to provide more clarity.  Finally, with the suit still lacking, Judge Reilly dismissed the case outright and ordered Murrin and his wife to pay civil sanctions of nearly $500,000 to the defendants he had sued.  

Murrin and his wife appealed the award of sanctions, and the court ruled that Murrin's wife was exempt from the sanctions.  Following that decision, Murrin's wife then filed another lawsuit in state court, this one tipping the scales at 181 pages.  This time, the defendants removed the case to federal court, which generally has less tolerance for such suits.  The suit was only slightly more successful, and met with equal displeasure by the assigned judge, United States District Judge Patrick J. Schultz.

Indeed, in an Order for Judgment entered in Murrin's favor, Judge Schultz pulled no punches in summarizing Murrin's litigation tactics:

This Court has first-hand knowledge of the Murrins’ litigation strategy, which the Court earlier observed “resembles nothing so much as peine forte et dure — a method of torture by which heavier and heavier weights are placed on the chest of a defendant until the defendant either confesses or suffocates.”  Docket No. 337 at 2.  Perhaps never in the history of this District has more paper been filed by a litigant to less effect.  By way of example, the Court points out that the docket in this case contains over four hundred entries despite the fact that this action has barely progressed past the pleading stage.  The Murrins have proven to be singularly incapable of following the Federal Rules of Civil Procedure and singularly incapable of following the directions of this Court.

However, the order of sanctions against Murrin was not overturned, and several of those originally sued by Murrin then helped push Murrin into bankruptcy in retribution for what they deemed excessive and overreaching legal tactics.  A bankruptcy judge later imposed a receivership on Murrin's assets, observing that

"Ultimately, far too much of his asserted right to root around in discovery was based on a shallow and conclusory theory of 'conspiracy' among nearly four dozen named defendants, and nothing more.

After Judge Reilly filed an ethics complaint against Murrin with the Office of Lawyers Professional Responsibility, it was recommended that Murrin's law license should be suspended for a year.  After reviewing the recommendation, the Minnesota Supreme Court agreed, but imposed a six-month suspension.  Murrin insinuated he would fight the decision, maintaining that "I got hit for doing the right thing.  And I'll never back down."

A copy of the Judgment obtained against Avidigm by Murrin is here.

A copy of the Minnesota Supreme Court's decision suspending Murrin is here.

Youth Baseball Coach Sentenced to Prison for Ponzi Scheme

A Louisiana youth baseball coach was sentenced to prison for operating a Ponzi scheme that duped investors out of hundreds of thousands of dollars - including parents of players on his baseball team.  Hugo Urrea, 55, pled guilty Monday to a variety of charges including securities fraud, nine counts of felony theft, and money laundering in excess of $100,000 before State Judge Allison Penzato.  Judge Penzata sentenced Urrea to 20 years for the money laundering charge, with 15 of those years suspended; five years for the securities fraud charge; and 10 years for the theft charges, with five of those years suspended.  Urrea will likely serve several years in prison, as the sentences were ordered to be served concurrently, rather than consecutively.  Along with the sentence, Judge Penzata also ordered Urrea to pay $247,000 in restitution to his victims.

According to authorities, Urrea solicited individuals to invest with him or enlist his services for investment advice.  However, investors were not told that, over the past twenty years, Urrea had been fired from six different broker-dealers, and that several complaints had been filed against him for violations including the unauthorized signature of customer names and engaging in unauthorized trades, according to records maintained by the Financial Industry Regulatory Authority ("FINRA").  According to FINRA, Mr. Urrea has not been registered with a broker-dealer since 2009 and had since been ordered to cease-and-desist from acting as an investment adviser.  This information was freely available using FINRA's Broker-Check option available to the public.

In total, Urrea received approximately $419,000 from nearly two dozen individuals that included neighbors and parents of players on the baseball team coached by Urrea. However, rather than use investor funds as promised, Urrea instead used the money for a variety of personal expenses including paying his mortgage and his son's college tuition to Auburn University.  When some clients began to question Urrea's services, he used funds from other investors to satisfy the redemption requests.  He was arrested in September 2011.

Upon his release from prison, Urrea must also serve five years of active supervised probation.  


Former Attorney At Rothstein Firm Receives Three-Year Prison Sentence

A former attorney in the law firm used by Scott Rothstein to perpetrate his $1.4 billion Ponzi scheme was sentenced to serve three years in federal prison for helping the firm make illegal federal campaign contributions.  Steven Lippman, 50, was sentenced by United States District Judge James Cohn after previously pleading guilty to one count of conspiracy earlier this year.  The sentence was less than the 41-month to 51-month range recommended by prosecutors, although not as low as the 18-month range sought by Lippman's lawyers.  Lippman was also fined $15,000 and ordered to pay $179,000 in restitution.

According to authorities, Lippman sought to increase the political clout of Rothstein's former law firm, Rothstein Rosenfeldt & Adler ("RRA") by illegally "bundling" political campaign contributions to Senator John McCain's failed 2008 presidential bid.  In return for serving as a 'straw donor', RRA provided Lippman with money, home renovations, and a $134,000 Maserati, among other things.  Through these contributions, RRA became the largest contributor to McCain's campaign.  

Lippman is the latest in former RRA associates to be charged for a role in Rothstein's scheme.  Rothstein was sentenced in June 2010 to a fifty-year sentence.  


Men Behind $1.6 Million Hawaii Ponzi Scheme Sentenced to Prison

Three members of a Honolulu investment group were sentenced to federal prison for their role in a Ponzi scheme that bilked investors out of nearly $2 milion.  Syed Qadri, 39, Ruben Carrillo Gonzalez, 50, Jeffrey Greenhut, 40, received prison sentences of fifty-one months, forty-one months, and twenty-four months, respectively.  United States District Judge Leslie Kobayashi also handed down a one-month sentence to Qadri's wife, Patricia Rodzkowski, for her role in the scheme.  The three men had pled guilty in June.  

According to authorities, the men operated Amasse Capital LLC ("Amasse") and Solomon & Co LLC ("Solomon").  From january 2006 to September 2006, the companies purported to invest in high-yield bonds that were advertised as nearly risk-free, with investors promised monthly returns ranging from 100% to 400%.  However, in reality, the operation was a classic Ponzi scheme, with investor funds being used to make Ponzi-style payments to existing investors.  

In addition to the prison sentences, Judge Kobayashi also ordered the three men to pay restitution to their victims.


Man Who Offered "Get Rich For Sure" Investment Accused of $20 Million Ponzi Scheme


A California man has been arrested for what authorities called a massive Ponzi scheme that may have defrauded investors and lenders out of more than $20 million. Lawrence "Lee" Loomis, 54, along with six other associates, was named in a 50-count indictment charging him with mail fraud and wire fraud. According to the indictment, Loomis is accused of perpetrating multiple fraudulent schemes through his company, Loomis Wealth Solutions ("LWS"), at least one of which with the assistance of his father-in-law, John Hagener. Each count of mail fraud and wire fraud carries a maximum sentence of twenty years in prison as well as a fine of up to $250,000.

According to the Federal Bureau of Investigation, which conducted the investigation along with assistance from the Internal Revenue Service, Loomis pitched investors on the possibility of acquiring real estate at no cost through an investment in LWS. Specifically, investors were told to (1) purchase whole life insurance, (2) "harvest" home equity and retirement accounts to buy shares in the Naras Funds, and (3) to serve as "nominees" in the purchase of residential real estate controlled by Loomis. For each house an investor agreed to serve as "nominee" for, Loomis promised a monthly payment of $300 that could be applied to the life insurance premiums. According to Loomis, this investment plan was

"simply the best financial plan ever created." 

As part of the plan, investors purchased shares in the Naras Funds, which offered guaranteed annual returns of 12%. According to Loomis, these above-average returns were the result of investments in junior mortgages paying 14% annual returns. To assure investors that their contributions would be safe, Loomis represented that the Funds were guaranteed by secured deeds of trust and the backing of a third-party company. Loomis is also accused of participating in several other schemes designed to artificially inflate home values through property-flipping.

Loomis held numerous hotel seminars in California, Washington, and Illinois in which he solicited potential investors. Investors were provided with literature extolling the benefits of Loomis' investments. According to a California news-station, Loomis told investors that

"It's not get rich quick. But the reality of it is it's get rich for sure."

All told, it is estimated that nearly 200 investors entrusted at least $20 million with Loomis and his various schemes. However, according to authorities, Loomis used the constant infusion of investor funds to operate a massive Ponzi scheme and sustain his lavish lifestyle. Investors were provided with false account statements showing investment growth when, in reality, Loomis was simply using new investor funds to pay Ponzi-style returns to existing investors. The Sacramento Bee quotes unnamed federal authorities in estimating that losses could potentially top $100 million. 

Hagener was released on $1 million bond, while Loomis was ordered to remain in federal custody over fears that he posed a flight risk due to the severity of the charges.