Another Guilty Plea in $29 Million Texas Ponzi Scheme

A Texas man has pled guilty to federal charges for his role in a Ponzi scheme that ultimately took in $100 million from hundreds of investors around the country.  Gregory W. Thompson, 58, entered guilty pleas to charges of securities fraud and money laundering that, under federal sentencing guidelines could result in a prison sentence of up to eight years for Thompson.  Thompson had originally been charged in an eighteen-count indictment that was later reduced to seven counts.  

Thompson was part of a group of six individuals involved with Horizon Establishment, which purported to invest in high-yield programs with foreign banks and promised investors monthly returns ranging from five to eight years.  The group ultimately took in more than $100 million of investor contributions.  The head of the scheme, Travis Correll, pled guilty in 2007 to a single wire fraud charge and is currently serving a nine-year prison sentence.  Prosecutors allege that Thompson personally collected $20 million from 40 investors, some of whom were members at his church.  Instead of investing, Thompson used the funds to pay personal expenses, including the mortgage of his now-defunct company, and to pay returns to older investors.

Thompson and the remaining participants have settled charges with the SEC, which froze the operation's assets in 2005.   Sentencing is scheduled for October 26, where it is likely Thompson will also be ordered to pay restitution to defrauded investors.

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."