Texas Man Indicted for $2 Million Ponzi Scheme

Authorities unsealed an indictment Thursday against a Texas man accused of bilking investors out of $2 million in an elaborate Ponzi scheme.  Scott Yermish, originally charged as Scott Lindemann, was charged with seven counts of wire fraud.  Each count of wire fraud carries a maximum prison sentence of twenty years and a criminal monetary penalty of up to $250,000.  If convicted, Yermish may also be ordered to pay restitution to defrauded investors.

According to the indictment, Yermish posed as Scott Lindemann with Interactive Brokers, an investment brokerage company in Greenwich, Connecticut.  Through false representations, Yermish induced investors to provide information allowing him to gain access to investors' accounts at Interactive Brokers, including user names, passwords, and security access cards.  Investors were then provided with account statements showing substantial profits in those accounts, when in reality the accounts had been raided by Yermish and subsequently closed.  In total, at least twenty investors are said to have suffered losses of $2 million.

Yermish was arrested in July by the FBI and is currently behind bars awaiting transfer to San Antonio.  He had previously served fifteen months in jail for fraud in 1994.  

A news release from the Justice Department is here.

New Jersey Man Sentenced to Prison for $2.4 Million Ponzi Scheme

A former investment adviser was sentenced to nearly five years in prison for orchestrating a Ponzi scheme that swindled investors out of over $2 million.  Carlo Chiaese, 38, of Livingston, New Jersey, had previously pled guilty to one count of securities fraud before United States District Judge William J. Martini.  Securities fraud carries a maximum sentence of twenty years in prison and up to a $5 million fine.  

Chiaese, who had worked in the financial industry since at least 1999, operated an independent investment firm by the name of CGC Advisers, LLC.  From November 2008 to September 2010, Chiaese solicited clients by portraying the prospect of steady annual returns through a conservative investment strategy utilizing stocks and bonds.  In total, nearly $3 million was raised from investors, including approximately $1.7 million from a pension fund representing tugboat and ferry workers in New York and New Jersey.  To make the operation appear legitimate, investors were provided with account statements containing fictitious securities holdings.  Yet, instead of investing in securities, Chiaese used the majority of investor funds to sustain a glamorous lifestyle that consisted of high-end cars, expensive travel, and luxury fashion.  The remainder of funds were used to make transfers to family members and to make supposed interest payments to existing investors.

Judge Martini also ordered Chiaese to pay $2.5 million in restitution to swindled investors, and to serve three years of supervised release.  

Accused "Clubhouse Ponzi Schemer" Arrested in Thailand

A south Florida man accused of running a Ponzi scheme from his perch at a golf clubhouse bar has reportedly been arrested in Thailand.  A federal arrest warrant had been issued for Roger A. Miller, 58, who, according to the Orlando Sentinel, had held a press conference earlier this week claiming he was penniless and living in Thailand attempting to recover investors' money.  The federal warrant charged Miller with unlawful flight to avoid prosecution on two charges of grand theft currently pending in Broward County, Florida.  

As previously covered by Ponzitracker, nearly twenty investors filed suit against Miller alleging at least $2.2 million in damages.  According to the lawsuit, Miller was a frequent figure at the Oriole Golf Club in Margate, Florida, where he was known for his investing prowess.  Miller solicited investors with several purported opportunities, including residential housing in Thailand and hard money loans to individuals with poor credit. Several investors reported that Miller would often bring envelopes full of cash containing interest payments to the clubhouse.  However, it is now alleged that Miller did not use these funds to invest, and instead operated a Ponzi scheme.  Miller disappeared in early 2009 when the scheme is thought to have unraveled.  

According to the Orlando Sentinel, investors in Miller's scheme were defrauded of up to $5 million.  Miller has allegedly been living in Thailand since fleeing south Florida in early 2009.  It is unknown how long it will take to extradite Miller back to the United States.

Prison Sentence for Wine-Based Ponzi Scheme

A sales director of a wine-based investment program was sentenced by a British court to five years in prison after pleading guilty to charges that the program was a $45 million Ponzi scheme.  Richard Gunter pled guilty for his role in the scheme that promised investors large returns from making short-term investments in various spirits, including brandy, cognac, and wine.  Gunter's conviction is the third to date for former Vintage Hallmark employees.  

According to investigators at the Serious Fraud Office in England, Vintage Hallmark and the Hallmark Partnership solicited individuals in Canada and the United States to invest in fine wines and whiskeys.  A ten-month investment in champagne yielded 50%, while a three-month whisky investment yielded 110%. When these investments matured, investors were then persuaded to roll over these fictitious profits into further ventures secured by promissory notes.  In total, over 300 individuals invested thirty million pounds, which equates to over $45 million.  The scheme unraveled in 2003.

Gunter has already been convicted and sentenced in 2008 to nearly five years in prison for his role in a similar spirits-based scam.

Guilty Plea in Sacramento Ponzi Scheme

A California man entered a guilty plea to charges he operated an investment club Ponzi scheme that defrauded investors out of $2.2 million.  Garry Bradford, 62, of Sacramento, pled guilty to a single count of wire fraud in front of United States District Judge Garland E. Burrell, Jr.  Wire fraud carries a maximum prison sentence of twenty years along with a criminal monetary penalty of up to $250,000.

Bradford was the president of Millenium Capital Group, which solicited investments in land and construction-related ventures.  From 2003 to 2008, nearly $2.2 million was raised from twenty-one investors, some of whom refinanced their houses or used retirement funds to fund their investment.  However, instead of making real estate investments, Bradford used funds of new investors to make payments to existing investors, a hallmark of a Ponzi scheme.  The scheme unraveled in 2008 when Bradford was unable to meet payment obligations to investors.

Bradford is scheduled to be sentenced on April 6, 2012.