Indian Conglomerate Tata Warns Of Tata-Branded Ponzi Scheme

A massive Indian conglomerate that operates over 100 separate companies worldwide has issued a public warning to consumers that a British Virgin Islands company has been wrongfully using the "Tata" company name and soliciting investors for an alleged Ponzi scheme promising monthly returns of up to 100%.  Tata Group, which operates in over 80 countries and is perhaps best known for its Tata Motors automobile company, warned investors that a British Virgin Islands entity, Tata Agro Holding Ltd., had been touting its affiliation with the Indian conglomerate as it solicited investors.  Tata Group issued a strongly-worded denial disavowing any connection between it and Tata Agro, and indicated that it had taken unspecified action to prevent any further confusion.

According to Tata Group, the BVI entity had been soliciting investors on several platforms, including an online website at tataagro.com.  While the website is currently down, a cached version of the website is available here.  The company is alleged to solicited investments ranging from $5 to up to $10,000, promising daily returns ranging from 1.9% to 3.1% that increased commensurate with the size of the investment.  Tata Agro advertised itself as an agricultural investment company that claimed to be in the business of "assets (sic) management through wheat and corn futures trading on stock exchanges."  The company claimed it was a subsidiary of Tata Group, and represented that it had been engaged in the agricultural investment business since 2001.  

Investors were also encouraged to participate in the company's "referral program," which promised commissions for first, second, and third-level referrals attributable to the investor.  To convince investors of the legitimacy of the scheme, Tata Agro advertised that Amit N Dalal, who currently serves as the executive director of Tata Investment Corporation Ltd., was the President and CEO of Tata Agro.  

At this time, further information is not available concerning the potential number of investors or value of investments in Tata Agro or any criminal or regulatory action taken against the company.  

North Carolina Man Ordered To Pay $5.2 Million For $1.8 Million Ponzi Scheme

A federal judge ordered a North Carolina man to pay over $5 million in penalties and restitution for operating a commodities Ponzi scheme that took in nearly $2 million from investors.  Michael Anthony Jenkins and his company, Harbor Light Asset Management, LLC ("HLAM"), were ordered by U.S. District Judge James C. Fox to pay $1.3 million in restitution and $3.9 million in restitution for operating a commodities Ponzi scheme that solicited at least $1.8 million from nearly 400 investors.  Jenkins and HLAM were also permanently banned from commodities trading as well as enjoined from future violations of federal securities laws.  

Beginning in January 2011, Jenkins began soliciting investors for HLAM in person, in small groups, and by phone.  Jenkins told potential investors that HLAM was engaged in the business of investing in E-mini S&P 500 futures ("E-mini Futures"), and promised potential lucrative trading gains.  Investors were assured that their funds would be immediately wired to a specific trading account where they would be used to trade E-mini futures, and were provided with near-monthly account statements from Jenkins showing significant profits.  In total, Jenkins and HLAM raised at least $1.8 million from approximately 377 investors.

However, of the approximately $1.8 million raised, only $138,825 - less than 10% of the total - was transferred as promised to a specific account to trade E-mini futures.  This trading did not result in the hefty gains advertised in investors' monthly statements, but rather a total loss of approximately $3,500.  The remainder was diverted by Jenkins for a variety of unauthorized uses, including trading in gold and oil futures, cash withdrawals, payment of personal expenses, and payments of principal and purported trading profits to investors.  Additionally, of the payments made to investors, more than $400,000 was paid to certain investors in excess of their invested principal.  

Of note, Jenkins was the subject of discipline by the National Association of Securities Dealers in 1989, who barred him from associating with any of its members and imposed a $5,000 fine after Jenkins was found to have misappropriated a $5,000 customer check for his own personal use.   Additionally, while Jenkins had applied for registration with the CFTC as an associated person in April 2011, the application was subsequently withdrawn without Jenkins having obtained registration.

The order imposing relief is below:

Order by jmaglich1

Rothstein Colleague Found Guilty, Judge Hints At Perjury Charge

A Florida jury took just two hours to deliver a guilty verdict in the trial of a former attorney in convicted Ponzi schemer Scott Rothstein's now-defunct law firm.  Christina Kitterman, who attracted national headlines for her decision to call Rothstein to the stand in her defense, was found guilty of three counts of wire fraud after being accused of assisting Rothstein with his scheme by posing as a Florida Bar official during a meeting with investors.  Prosecutors have indicated they will likely seek a nine-year sentence, while Kitterman's attorneys are hoping for five years or less.  Interestingly, after allowing Kitterman to remain free on $250,000 bond, U.S. District Judge Daniel T. K. Hurley suggested that Kitterman may have committed perjury during her trial testimony.

Kitterman was indicted last summer, along with south Florida attorney Douglas Bates, on charges that she was a participant in Rothstein's scheme while employed as an attorney at his former firm, Rothstein Rosenfeldt Adler ("RRA").  There, according to authorities, Kitterman agreed to participate in a meeting with Rothstein investors posing as a Florida Bar official, telling investors that Rothstein's bank accounts had been frozen as the result of a pending bar association.  Kitterman was indicted on three counts of wire fraud.

Kitterman's attorneys successfully argued that Rothstein should be compelled to testify at her trial, and they may now question their decision after Rothstein testified for 1.5 days and generally was not observed to have bolstered Kitterman's defense.  In his testimony, Rothstein claimed that he and Kitterman had a "friends with benefits" relationship and that Kitterman was aware of her actions in assisting him.  

Judge Hurley allowed Kitterman to remain free on $250,000 bail until her sentencing, to which he cautioned Kitterman against failing to appear.  Prosecutors indicated that Kitterman will likely ask for a nine-year prison sentence for Kitterman, while her defense attorneys insisted a sentence below five years was appropriate.  However, Judge Hurley insinuated that Kitterman may have committed perjury during her trial testimony which, if true, could result in a sentencing enhancement or even perjury charges.

According to the Sun-Sentinel, sentencing is expected later this year.

Former Sheriff Gets 30-Month Sentence For $1.2 Million Ponzi Scheme

A former sheriff's deputy will spend the next thirty months in federal prison for orchestrating a Ponzi scheme that raised more than $1.2 million from victims that included fellow law enforcement personnel.  David N. Hawkins, 46, received the sentence from U.S District Judge Robert E. Blackburn, who also ordered Hawkins to serve three years of supervised release following completion of the sentence.  Hawkins pleaded guilty last year to one count of wire fraud and one count of money laundering.

Hawkins was hired by the El Paso Sheriff's Office in 2001, and soon thereafter was sworn in as a sheriff's deputy.  In or around 2006, Hawkins began attending training courses on how to trade foreign currencies ("forex").  Beginning in 2009, Hawkins used this knowledge to hold himself out as a sophisticated currency trader, telling colleagues, family, and friends that he had several years of experience in achieving consistent gains - sometimes as high as 62% - from forex trading.  Unbeknownst to his employer, Hawkins told potential investors that an investment in his PD Hawk Investment Fund would yield consistent 10% monthly returns - an annual return of over 100%.  Based on these representations, Hawkins raised more than $1 million from over 70 investors.

However, according to the FBI, "at no time were [Hawkins'] investments ever profitable."  Instead, Hawkins ran the classic Ponzi scheme, using investor funds to repay earlier investors and to make purported interest payments.  Hawkins used investor funds as his personal piggy bank, purchasing multiple automobiles, paying personal expenses, and even buying two semi-professional indoor football franchises in Illinois and Texas.  These teams never became operational, and authorities began investigating after Hawkins abruptly cancelled the 2012 season.  Authorities estimate that total losses to investors exceeded $200,000.  

Hawkins was also ordered to pay restitution of $204,348.91 to the remaining victims.

FBI Charges Two With $110 Million Real Estate Ponzi Scheme

Authorities unveiled criminal charges against two men on charges they masterminded a real estate Ponzi scheme that swindled victims out of more than $110 million.  Michael Stewart, 66, of Phoenix, and John Packard, 63, of Long Beach, California, were arrested earlier this week after a grand jury returned a 16-count indictment charging each of the men with 11 counts of mail fraud, three counts of bank fraud, and two counts of bankruptcy fraud.  If convicted of all charges, the men face hundreds of years in prison and millions of dollars in criminal penalties.  

The men owned and operated Pacific Property Assets ("PPA"), a company they formed in 1999.  The two used PPA to purchase, refurbish, and eventually resell apartment complexes in Southern California and Arizona, financing the acquisitions through mortgages and raising money from potential investors to fund property renovations.  While the operation generally was not profitable, PPA was able to benefit from a booming real estate market and skyrocketing property values to raise cash by constantly refinancing the properties.  From 1999 to 2009, PPA acquired more than 100 properties and raised tens of millions of dollars from investors. 

As property values began slowdown and eventual collapse in 2007, PPA was facing large debt payments to its mortgage lenders and private investors.  The men allegedly misrepresented PPA's financial condition, and continued to raise tens of millions of dollars from investors that were used to make payments to lenders and investors, and even Steward and Packard themselves.  Eventually, PPA and several other related companies filed bankruptcy in June 2009, indicating that it owed approximately $90 million to hundreds of investors and approximately $100 million to various banks.  After going through the bankruptcy process, private investors received nothing, while banks lost at least $24 million.  

The charges also accuse Steward and Packard of bankruptcy fraud for their alleged transfer of hundreds of thousands of dollars in PPA funds to the mens' personal bank accounts for their use and to pay their personal attorneys, and thus out of the reach of their creditors.

The Securities and Exchange Commission previously brought civil fraud charges against the pair in May 2012. 

A copy of the SEC's complaint is below:

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