Idaho Pastor Charged in Million Dollar Forex Ponzi Scheme

The U.S. Currency Futures Trading Commission announced it had charged and obtained a consent order against an Idaho Pastor for his operation of a million dollar currency trading Ponzi scheme.  Jeremiah C. Yancy, also known as Jeremiah C. Glaub, of Atoka, Idaho, was charged along with his company, Longbranch Group International LLC, of Houston, Texas.  The CFTC had obtained an emergency court order freezing Yancy's assets in August 2010.

From July 2008 to August 2010, Yancy and Longbranch Group solicited investments from at least 64 victims, including members of Yancy's church in Idaho where he was a Pastor.  Investors would open foreign currency trading accounts with Yancy, who falsely represented that his company managed currency trading for non-profits including orphanages.  Investors were promised monthly returns of twenty to forty percent, and assured that their investment was risk-free.  Fictitious account statements were also generated and sent to investors as proof of the authenticity of the operation. Yet, in reality, Yancy and Longbranch Group never traded forex, and instead used investor funds to pay returns to older investors.  

Investors ultimately placed $630,000 with Yancy, of which $230,000 was ultimately lost.  As part of the terms of the consent order entered, Yancy and Longbranch Group were ordered to pay restitution of $692,000 to defrauded investors, and each ordered to pay a $692,000 civil monetary penalty.  Each are also permanently enjoined from engaging in any commodity-related activity.  

Ex-Lawyer Pleads Guilty to $6 Million Ponzi Scheme

A Pennsylvania man has entered a guilty plea in connection a a Ponzi scheme that ultimately bilked investors out of $6 million.  Ira J. Pressman, 64, plea guilty to wire fraud, mail fraud, and money laundering in federal court on Friday.  As earlier covered by Ponzitracker, Pressman had been indicted in June following charges filed by the state of Pennsylvania.  Under federal sentencing guidelines, Pressman faces a sentencing range of 97 to 121 months in federal prison.  

Pressman founded PJI Distribution Corp., which held itself out to investors as a successful business engaged in purchasing and reselling closeout and overstock merchandise.  Investors were solicited to invest in no-risk merchandise deals that promised astronomical returns of up to 100%.  In total, Pressman collected over $20 million from 20 investors.  However, Pressman in fact engaged in little legitimate business, instead using new investor funds to pay returns to older investors, a classic hallmark of a Ponzi scheme.  Prosecutors estimated the total loss to investors at roughly $6 million.

A conviction for all three counts would have carried a maximum prison sentence of 50 years.  Pressman is scheduled to be sentenced November 9.

Las Vegas Man Arrested on Suspicion of Running Ponzi Scheme

The Securities Division of the Nevada Secretary of State charged a Las Vegas man with running a Ponzi scheme that may cost investors millions of dollars.  Hans Seibt, 70, was charged with twenty-five counts of securities fraud and six counts of theft in connection with a scheme that targeted investors in several states.  The FBI's office in Las Vegas also confirmed that an investigation into Seibt was ongoing, and a Las Vegas newspaper cites sources who indicated a federal grand jury may soon be asked to asked to indict Seibt on charges of mail and wire fraud.

Seibt, who purported to be a successful real-estate developer, has been under increasing investigation since he and several companies he founded filed for bankruptcy protection in November 2008, citing debts exceeding $70 million.  These companies included HSLV Development Corporation and Clark and Nye County Development Corporation, which solicited investments of $10,000 or more from investors.  In return, investors received trust deeds, joint venture agreements, or subscription agreements, which supposedly were secured by land Seibt owned in Nye County.  Instead, authorities allege, Seibt used investor funds to pay personal expenses and to fund distributions to other investors.  

A trustee appointed to oversee the liquidation of Seibt's companies has been quoted as viewing the prospects of any meaningful recovery for defrauded investors as "pretty bleak."  The bankruptcy judge overseeing the case has refused to grant a discharge of Seibt's debts due to increasing evidence that Seibt was running a Ponzi scheme, meaning that Seibt cannot utilize the protections of bankruptcy law against creditors.  

Seibt is currently in a Las Vegas county jail, and is scheduled to make his first appearance Monday.

SEC Looking Into Stanford Receiver Fees

In response to growing investor displeasure, the Securities and Exchange Commission has confirmed it is opening an investigation into fees charged by the court-appointed receiver of Allen Stanford's $7 billion Ponzi scheme.  The receiver, Ralph Janvey, was originally appointed by a Dallas federal judge at the request of the SEC following the exposure of Stanford's fraud.  As reported by CNBC, the SEC is specifically looking into allegations of improper conduct of SEC employees.

As covered earlier by Ponzitracker, a group of Stanford investors displeased with Janvey's progress had filed a motion to intervene on July 7, alleging that the recovery to date had been largely consumed by fees paid to the receiver.  In support, the investors claimed that, of the $120 million collected thus far to date by Janvey, nearly all - $118.2 million - had been paid to Janvey and his legal team as expenses, leaving just $1.5 million available to investors.  Yet, according to the attorney for the investors bringing the motion, the SEC had not objected to any bill presented for payment by Janvey for over a year.  

Further, the group alleged that an arrangement reached between Janvey and a court-appointed group supposedly responsible for overseeing the Receiver's actions was instead an improper arrangement in which the group would receive 25% of all future recovery of fraudulent transfer lawsuits.  

An attorney for Janvey responded to the latest allegations, stating that Janvey would comply promptly to any inquiry, and that any allegations of an inside deal between Janvey and the investor committee was "patently false and completely irresponsible."  

Illinois Man Sentenced to 6 Years in Prison for $5 Million Ponzi Scheme

An Illinois man was sentenced to six years in federal prison for orchestrating a Ponzi scheme that ultimately swindled $5 million from investors.  Scott M. Ross, 42, had pled guilty in March to mail fraud, which carried a maximum potential sentence of 20 years.  Prosecutors had asked United States District Judge William Hibbler for a sentence range of 6 1/2 years to 8 years.

Ross operated Harbor Wealth Management and two subsidiaries that purportedly engaged in the insurance investment business.  Between 2006 and 2009, investors were offered the ability to purchase investments through three investment funds operated by Ross: the Elucido Fund, LP, the Moondoggie Fund, LP, and the Maize Fund LP.  The Elucido Fund supposedly invested in life settlement contracts, while the Moondoggie Fund purported to invest in the stock of Moondoggie Technologies, which was reportedly developing a dual-sided computer monitor.  Over 150 investors invested $5 million in these two funds, which promised returns up to 34 percent annually.  Instead, Ross commingled investor  contributions from the three Funds to pay business expenses, make payments to investors purporting to be interest payments, and pay himself a large salary.  

A court-appointed receiver has recovered and liquidated Ross' business and personal assets, resulting in $2.7 million for distribution to defrauded investors.  In addition to his sentence, Judge Hibbler also ordered Ross to pay restitution of $3,699,834.  Ross is to report to federal prison on October 18, 2011.