Texas Man Arrested for Potential Ponzi Scheme

Texas authorities arrested a man Wednesday for his involvement in a potential Ponzi Scheme.  Robbie Dale Walker, 53, was charged with "Theft Over $200,000" and released on $10,000 bail.  The charge carries a potential jail sentence of 5-99 years and up to a $10,000 fine.

Walker was arrested after an investigation aided by the United States Secret Service into Walker's solicitation of investors for his company, RD Walker Resources, Inc.  According to Walker, the firm was a gas and oil exploration company.  Walker apparently targeted elderly investors, who were promised annual interest payments in return for funds to assist in "development" of potential ventures.  Authorities believe that additional victims may exist that have not yet been identified.  

Madoff Trustee Files Suit Against Additional Feeder Funds

Irving Picard, the court-appointed trustee overseeing the liquidation of Bernard Madoff's $50 billion Ponzi Scheme, has sued a hedge fund unit of Citigroup in Bermuda for its role in overseeing several so-called 'feeder funds' that channeled investor funds into Madoff's fraud.  Citi Hedge Fund Services Ltd. of Bermuda, tasked with confirming the valuation provided by Madoff of Kingate Global Fund Ltd. and Kingate Euro Fund, instead simply used Madoff's data and assumed it was accurate, Picard alleged.

As a result of the failure to perform due diligence, Picard is demanding the return of nearly $1 billion that the feeder funds were able to redeem from Madoff's scheme before it was revealed in December 2008.  The Kingate feeder funds are currently being liquidated in proceedings in the British Virgin islands.

With the lawsuit, Picard appears to be extending the web of legal exposure to not only those who invested directly with Madoff, but also to third-parties who provided services to those funds that invested in Madoff's scheme.  Picard has filed over 1,000 lawsuits seeking funds for defrauded investors, recovering nearly $10 billion to date.

Judge Delays Rothstein Deposition Until December 12th

In a victory for prosecutors, a federal district court judge agreed to delay the deposition of Florida Ponzi Schemer Scott Rothstein sought by the trustee liquidating Rothstein's failed law firm.  District Court United States Bankruptcy Judge Raymond Ray had ordered prosecutors to make Rothstein available for questioning on the trustee's motion, who faces a two-year statute of limitations to file so-called clawback lawsuits to recover funds for investors.  District Court Judge James Cohn sided with prosecutors, who opposed the trustee's request to depose Rothstein on the basis that allowing Rothstein to answer questions could jeopardize ongoing criminal investigations that were close to culminating in additional indictments.  

Notable about the government's objection to the trustee's request was the caveat that, while opposing the trustee's request, prosecutors had offered instead to provide the trustee with information he might be seeking from Rothstein.  In the hearing held Friday in South Florida, it was revealed that the court-appointed trustee overseeing the process, Herbert Stettin, had reached an agreement to interview the prosecution, rather than Rothstein, in association with his ongoing investigation.  

Rothstein, sentenced to 50 years in federal prison, has been cooperating steadily with the government since after his arrest in hopes of winning a reduced sentence.  His cooperation has been rumored to be extensive, with some reports suggesting that he has been instrumental in providing information on associated organized crime syndicates.  

Guilty Plea in $18.5 Million North Carolina Ponzi Scheme

A Mooresville, North Carolina man entered guilty pleas on Thursday admitting to operating a Ponzi scheme that ultimately took $18.5 million from over 100 investors.  Shelby Dean Martin, 73, pled guilty to nineteen felony counts of securities fraud in a North Carolina state court, and was sentenced by Judge Christopher Collier to serve a minimum of 9 years 8 months in state prison.  Martin could ultimately serve up to thirteen years under the range imposed by Judge Collier.

Martin operated D. Martin Enterprises and DM Ventures, soliciting money from investors despite never being registered with the state of North Carolina to sell securities.  Investors were told that their money would be used to fund several companies, and that their funds were safe and obtainable at any time upon 30-day notice.  Investors were issued promissory notes detailing their investments, as well as promising interest payments between 10% and 50% annually.  Rather than receive interest based on profits obtained by Martin, investors were paid with funds from new investors - a classic Ponzi scheme.

Along with his prison sentence, Martin was also ordered to pay restitution to his victims in the amount of $5.35 million.  This case is notable in that prosecution of Martin's offenses was handled by the state of North Carolina.  Typically, federal authorities intervene and take the first shot at prosecution.

Utah Man Facing Trial for Ponzi Scheme Indicted For Additional Ponzi Scheme

Authorities have charged a Utah man with running a Ponzi Scheme even while awaiting trial on charges of running a previous scam.  Wayne Ogden, 47, was charged on Tuesday with six counts of wire fraud and one count of securities fraud in connection with the newly-uncovered scheme that prosecutors say has taken in $29 million of investor funds.  Ogden had previously been indicted in December 2007 on 15 counts of wire and mail fraud pertaining to a smaller scheme.

The newest Ponzi Scheme Ogden is alleged to have orchestrated operated under the name of Paradigm Acceptance LLC, which promised assistance to underwater homeowners by refinancing and restructuring mortgages.  Investors were charged a $1,500 fee in addition to a percentage of amounts purportedly saved as a result of Paradigm's assistance.  Returns of twenty percent on investor funds were promised to investors in as little as two months.  Instead, funds were used to pay large salaries to Ogden and his brother, Terry, and to older investors disguised as interest payments.

Wayne Ogden was previously indicted for a $1.74 million Ponzi Scheme as part of a real estate project in Kiowa, Colorado, where investors were promised returns as high as 100%.  Ogden was convicted of yet another similar scheme during the mid-1990's when five hundred investors lost approximately $7 million.  He was sentenced to two consecutive terms of up to fifteen years, but was paroled after serving 28 months.