Rhode Island Woman Arrested For $10 Million House Rehab Ponzi Scheme That Duped Step-Brother, Former Nanny

A Rhode Island woman was arrested on allegations that she ran a Ponzi scheme that raised more than $10 million from investors who thought they would receive half of the purported profits from the renovation and rehabilitation of foreclosed homes. Monique N. Brady, 44, was arrested and charged with a single count of wire fraud, a count which carries a maximum twenty-year prison sentence. The criminal charges come nearly a year after multiple investors sued Brady for the return of their money, including one investor who claimed that Brady “approached him about a new business she was starting to help support her children, including one with special needs.”

Brady formed MNB LLC (“MNB”) in October 2005. Brady told potential investors that MNB often contracted with private and government entities, including Freddie Mac, to perform large-scale rehabilitation projects on foreclosed houses throughout Rhode Island. Those investors were told that they could expect to receive 50% of the expected profits from these projects. In total, Brady raised more than $10 million from at least 32 investors, including Brady’s step-brother, the former nanny for her children, and multiple elderly victims who entrusted most or all of their life savings to Brady.

According to prosecutors, Brady’s claims of realizing significant profits from performing large-scale renovations were simply false. Instead, the work that MNB actually performed on some houses allegedly amounted to nothing more than menial tasks to preserve the value of those houses and prepare for an eventual sale such as snow blowing, electrical and boiler inspections, lawn mowing, and changing locks. boiler inspections. Far from bringing in significant revenues, the complaint alleges that most of those projects were for relatively small dollar amounts ranging from $25 to a few hundred dollars. Despite the menial nature of the work, Brady solicited investors to contribute large sums towards the purported projects - sometimes multiple investors for the same project. For example, the Complaint recaps the following instances of Brady’s solicitation of significant investments for projects that yielded far smaller revenues:

  • Two investors for the 144 Scappa Flow Road Project in Charlestown, RI. Brady received $20 in income for the project and $120,006 in investments.

  • Five investors for the 20 Arlee Road Project in Warwick, RI. Brady received $35 in income for the project and $47,925 in investments.

In other instances, the Complaint alleges that Brady simply solicited investments for projects that did not exist.

The criminal complaint is below:

California Investment Adviser Arrested And Charged With $7 Million Ponzi Scheme

Six months after he filed for bankruptcy, a California investment adviser was arrested and is now facing civil and criminal charges accusing him of operating a $7 million Ponzi scheme that pitched investments in an organic beef ranch, housing projects, and a marijuana cultivation plan. Christopher Dougherty, 45, was arrested by California state authorities yesterday morning on charges of grand theft, elder abuse, and securities fraud and was also the subject of a complaint filed today by the Securities and Exchange Commission accusing him of violating federal securities laws. As of yesterday, Dougherty was being held on $5 million bond.

Dougherty has been in the financial services industry since 1998 as both a registered representative and an investment adviser, acting after 2012 solely as an investment adviser. Dougherty owned and operated several businesses, including C&D Professional Services, Inc. d/b/a C&N Wealth Management (“C&D”), JTA Farm Enterprises, LLC d/b/a JTA Cattle and Hay Broker Services (“JTA Farm”), and JTA Real Estate Holdings, LLC (“JTA Real Estate”). After forming relationships with many San Diego school district employees in the mid-2000s, Dougherty formed C&D and invited many of those contacts to join him at that firm. Dougherty ultimately had 30-40 advisory clients at C&D.

In addition to advising those clients on their third-party investments, he also invited them to invest through him in either (1) various “private placements,” (2) JTA Farm, or (3) JTA Real Estate. For example, clients were told that Dougherty’s “private placements” provided quarterly 5% dividends that were tax-free. For JTA Farm, Dougherty told clients that they were investing in his farm, with some investors being sold “hay contracts,” and that any profits would come from the farm’s operations. Finally, a few clients were told that their funds would be used by JTA Real Estate to renovate and sell a residential property in El Centro, California, and that they would derive profits from the eventual sale of the property. In total, Dougherty raised at least $7 million from his clients.

According to the Commission, Dougherty’s representations regarding the private placements, JTA Farm, and JTA Real Estate were false. Dougherty allegedly did not make a single investment using any funds raised from the “private placements,” his JTA Farm activities were minimal and did not make a profit, and the house touted to JTA Real Estate investors was never finished. Instead, the Commission claims that Dougherty mastermined a typical Ponzi scheme by using new investments to pay returns to existing investors. In addition to paying investors $2.4 million in fictitious interest and principal, Dougherty is also accused of misappropriating millions of dollars in investor funds to sustain a lavish lifestyle that included mortgage payments, cars, vacations, and credit card payments.

Dougherty’s scheme encountered difficulties in 2017 when he was not able to attract enough new investor money to sustain his existing investor obligations. After several investors filed suit against Dougherty in 20187 to recover their investments, Dougherty and his wife filed bankruptcy in October 2018. However, the U.S. Trustee’s review of Dougherty’s finances recently resulted in a March 2019 filing concluding that:

The Debtors’ practice of using new investment money to pay existing investors dividends and principal gave the false impression that the payments received by investors came from earnings and profits or from a return of the principal. This deception is the basis of a Ponzi scheme.

Fox’s San Diego affiliate reports that Dougherty faces up to 35 years in prison if convicted of the criminal charges.

CFTC Alleges Florida Forex Venture Offering 12% Guaranteed Returns Was $75 Million Ponzi Scheme

The Commodity Futures Trading Commission recently unsealed an action in Florida federal court accusing five men of operating a Ponzi scheme that raised at least $75 million from at least 650 investors nationwide.  The action, filed in the Middle District of Florida, charges Michael DaCorta, Joseph S. Anile, II, Raymond P. Montie III, Francisco “Frank” Duran, John Haas, and various entities with violations of the Commodity Exchange Act and seeks various relief including a permanent injunction, disgorgement of ill-gotten gains, restitution, and imposition of civil monetary penalties.  A temporary receiver was also appointed at the Commission’s request to marshal assets for the benefit of defrauded victims.

The Complaint alleges that the Defendants operated several entities, Oasis International Group Ltd., Oasis Management LLC, and Satellite Holdings Company, collectively as “Oasis” and  began soliciting victims in mid-2014 to invest in two commodity pools - Oasis Global FX, Limited (“Oasis Pool 1”) and Oasis Global FX, SA (“Oasis Pool 2” (collectively, the “Oasis Pools”) with promises of minimum 12% annual returns derived from trading forex.  Potential “lenders,” as investors were called in an apparent effort to avoid implicating federal securities laws, were told that the Oasis Pools had never had a losing month (indeed, one Defendant allegedly claimed the operation had never had a down day), that there was no risk of loss, and that the only way forex trading could be a bad investment was “if all the banks in the world closed.”  Oasis also allegedly offered a referral program designed to incentivize the recruitment of new investors.

Potential investors were told that DaCorta was the “brains of the operation” who was able to obtain consistent returns by trading forex, with the Oasis Pools purportedly returning 22% in 2017 and 21% in 2018.  Investors were also told that the guaranteed annual return of 12% was a minimum return, as investors would also be entitled to share the daily profits their funds purportedly generated from trading.  Oasis also allegedly made numerous representations concerning the safety of investor funds, including Defendant Duran’s purported statements that Oasis owned at least $15 million in real estate and precious metals that served as collateral for its investments and that “the Oasis Pools’ trading platform could not lose money unless there was a bigger problem in the financial markets and people were going to supermarkets with shotguns.”  Investors were received regular account statements showing the purported growth of their account.  Oasis ultimately raised roughly $75 million from at least 650 investors nationwide (despite claiming on its website that it was not open to U.S. investors). 

According to the Commission, however, all of these claims were false and designed to conceal Oasis’s operation of a classic Ponzi scheme by paying fictitious returns using investor funds.  For starters, the Commission alleges that potential investors were not told that DaCorta was effectively permanently banned from the forex trading industry in 2010 after several rules violations during his time as President of a forex trading firm.  While Oasis did engage in some legitimate trading, the Commission alleges that it suffered near total losses of investor funds (and not the consistent above-20% returns in 2017-2018).  For example, Oasis’s actual returns in 2017 and 2018 were -45% and -96%, respectively.  And contrary to Defendants’ representations regarding the safety of investor funds, the Commission alleges that the forex trades in the Oasis accounts had a 100:1 leverage ratio.  

Of the approximately $47 million that was not invested as promised, the Commission claims that Defendants misappropriated those funds to, among other things, make $28 million in Ponzi payments, purchase nearly $8 million of real estate, live a luxurious lifestyle, and make transfers to related third parties.  

A copy of the complaint is below: