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November 24, 2021

Guy Scott Griffithe, who controlled an entity called Renewable Technologies Solutions, Inc., and Robert William Russell, who owned an entity called SMRB, LLC, have been ordered to pay more than $6 million to resolve charges that they mislead investors by falsely stating that investments in Renewable would be used to operate SMRB, which held a license to grow marijuana under Washington’s recreational cannabis laws.  To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors.  Griffithe was found liable for more than $5.3 million in disgorgement, prejudgment interest, and civil penalties; Russell was found liable for more than $698,000 in disgorgement, prejudgment interest, and civil penalties.  SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Ponzi Schemes, Securities Fraud,

November 9, 2021

The owner of California-based DC Solar, Jeff Carpoff, has been sentenced to 30 years in prison for his role in a billion-dollar Ponzi scheme, the largest criminal fraud scheme ever prosecuted in the Eastern District of California.  Together with his wife Paulette and five other co-conspirators, Carpoff lied to investors about market demand for his company’s mobile solar generator (MSG) units, using false lease contracts and financial statements to back up the lie.  In addition to selling thousands of MSGs that didn’t even exist, the defendants paid prior investors using funds from newer investors, then laundered their ill-gotten gains.  USAO EDCA; Add'l defendant sentencing at USAO EDCA

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Ponzi Schemes,

October 20, 2021

Following his conviction at trial, investment manager Shawn Baldwin has been sentenced to 17 years in federal prison on investment fraud charges.  Baldwin, who had been previously disciplined by authorities, solicited investors with claims that overstated his credentials and misrepresented that their funds would be used to invest in stocks and other investment products.  In fact, Baldwin used most of the investors’ funds for his own personal benefit.  USAO ND IL

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations, Ponzi Schemes,

August 23, 2021

Charles McAllister was ordered to pay $16.2 million in restitution to resolve claims arising from his operation of BullionDirect, Inc., which promised customers that it would purchase precious metals on their behalf, and deliver or store that metal. In fact, however, McCallister and BullionDirect did not purchase or store metal for customers, but instead misappropriated customer funds to pay back other customers, cover business expenses, and invest in other businesses.  Defendants sent false account statements to customers to conceal the fraud.  In 2019, McAllister was sentenced to 10 years in prison.  CFTC

Tagged in: Criminal Proceedings, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes,

August 10, 2021

The principles of the Global Trading Club, Mayco Alexis Maldonado Garcia, Cesar Castaneda, and Joel Castaneda Garcia, consented to an order requiring payments totaling $1.75 million in restitution and civil penalties.  The CFTC alleged that the individual falsely represented that GTC employed “master traders” in cryptocurrency transactions, promised returns to customers, and caused misleading trading statements to be posted online.  The order bars the individuals from registering with the CFTC and from trading commodity interests.  CFTC

Tagged in: Cryptocurrency, Fraud in CFTC-Regulated Markets, Misrepresentations, Ponzi Schemes,

August 6, 2021

Colorado resident Wayde McKelvy was sentenced to 18 years in prison and ordered to pay $37 million in restitution following conviction on charges related to his operation of a Ponzi scheme.  McKelvy and others operated Mantria Corporation, which they claimed offered huge returns by investing in real estate and green energy projects.  Through these misrepresentations, defendants obtained more than $54 million in funds from duped investors.  USAO ED PA

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Misrepresentations, Ponzi Schemes, Securities Fraud,

July 21, 2021

Suneet Singal, First Capital Real Estate Investments, LLC, and related entities, agreed to pay fines totaling over $7 million to resolve claims that they made material misrepresentations and omissions concerning First Capital Real Estate Trust Inc., a real estate investment trust.  The SEC alleged that defendants misrepresented the REIT’s property holdings, and that Singal fraudulently directed funds to his own use.  Singal was barred from the securities industry for at least ten years.  SEC

Tagged in: Financial and Investment Fraud, Misrepresentations, Ponzi Schemes, Securities Fraud,

July 2, 2021

Roger Nils-Jonas Karlsson of Sweden has been sentenced to 15 years in prison and ordered to forfeit more than $16 million, including several properties and a resort in Thailand, in one of the largest cryptocurrency Ponzi schemes ever prosecuted in the United States.  Starting in 2011 until his arrest in Thailand in 2019, Karlsson induced thousands of investors from around the country and over 45 countries around the world to use cryptocurrency to purchase shares in an entity he called Eastern Metal Securities, by falsely claiming that it was run by award-winning economists and had zero risk of loss.  He then misappropriated at least $1.5 million to fund a lavish lifestyle for himself.  USAO NDCA; DOJ; SEC

Tagged in: Criminal Proceedings, Cryptocurrency, Financial and Investment Fraud, Ponzi Schemes,

June 29, 2021

Accountant Steven Brown, who operated a financial consulting and investment company called Alpha Trade Analytics, Inc., has been sentenced to over 4 years in prison and ordered to pay over $3.3 million in restitution for running a Ponzi scheme that affected 48 victims, many of whom were connected to a nonprofit that provided dance and theater arts education to children.  Through his role as an accountant for the nonprofit, Brown received access to high-net-worth individuals, whom he encouraged to invest with Alpha Trade through false promises.  When it came time to pay out investors, Brown used funds from new investors, as well as funds embezzled from the nonprofit.  USAO CDCA

Tagged in: Criminal Proceedings, Financial and Investment Fraud, Ponzi Schemes,

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