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Ponzi Schemes

This archive displays posts tagged as relevant to Ponzi and pyramid schemes. You may also be interested in the following pages:

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April 1, 2020

A Christian concert promoter and his business have settled with the SEC over charges of defrauding 145 investors of $3 million.  According to a press release, Jeffrey Wall of Maine and his business, The Lighthouse Events LLC, had promised investors that investments intended to promote Christian music concerts were “secured” and “guaranteed,” when in fact they were being used to pay off debt and make payments to earlier investors.  Each of the defendants have since been ordered to pay nearly $1.6 million each in civil penalties, $1.6 million in disgorgement, and over $200,000 in prejudgment interest.  SEC

February 11, 2020

Property developer Monique Brady of Rhode Island has been sentenced to 8 years in prison and ordered to pay $4.8 million in restitution for defrauding 23 investors of $10.3 million in a Ponzi scheme that ran from 2014 to 2018.  Brady told investors, many of them her own family, friends, and business associates, that her property rehabilitation business, MNB LLC, had secured contracts to perform large scale rehabilitation work on foreclosed properties in Connecticut, Massachusetts, New Hampshire, and Rhode Island.  To entice investors, Brady promised a 50% return on profits and showed forged emails that purported to show the contracts were valid.  In reality, however, the jobs she was hired to do were menial and paid less than $1,000, and she was using investor funds to finance an extravagant lifestyle.  When she became the subject of a federal investigation, she told investors to delete all records of their investments with her company, then met with federal officials to request that they investigate her investors for usury, before attempting to abscond to Vietnam.  DOJ; USAO RI

January 31, 2020

A former financial adviser, Li Lin Hsu, AKA Yilin Hsu Lee, has been sentenced to 11 years in prison and ordered to pay $5.3 million in restitution to the 20 victims of her $8.1 million Ponzi scheme.  Hsu began her scheme in 2014 while employed at Ameriprise Financial, promising victim investors, including her own relatives, that their funds would go toward low risk municipal bonds when in fact they were going toward homes in affluent neighborhoods, a luxury car, a luxury vacation, and luxury goods for Hsu herself. When Ameriprise discovered the misconduct in 2015, Hsu was fired and then barred by FINRA from working in the investment business, but not before she began her own companies, American Trading Group LLC and American Capital Republic, Inc, where she managed to defraud additional investors.  USAO CDCA

Top Ten Financial and Healthcare Fraud Prison Sentences of 2019

Posted  01/23/20
Prison tower and fence silhouetted against sky
Financial and healthcare fraud schemes can result not just in civil investigations and liability, but also in prison time for the individuals involved.  In 2019, the Department of Justice obtained substantial prison sentences in numerous cases involving healthcare and financial frauds, helping to bring justice to the patients, investors, or individuals harmed by criminal fraudsters.  Many of the fraudulent...

January 9, 2020

After being charged with defrauding brokerage customers in May 2018 and pleading guilty in December 2018, a former registered investment advisor, Steven Pagartanis, has been sentenced to over 14 years in prison and ordered to pay $6.5 million for orchestrating the 18-year, $13 million fraud.  Pagartanis had targeted elderly women and promised an 8% return on investments.  However, he secretly laundered their investments and used the money on personal expenses, causing investors to lose over $9 million in total.   USAO EDNY

November 21, 2019

Jin K. Chung was sentenced to 10 years in prison following his guilty plea on charges related to a foreign exchange trading scam he created and ran.  Chung started two companies, SNC Asset Management, Inc., and SNC Investments, Inc., advertising them as highly successful foreign exchange trading firms and promising investors annual returns between 24% and 36%.  Hundreds of individual investors opened accounts with SNC; Chung deposited their money bank accounts he controlled and sent them phony statements.  In his guilty plea, Chung acknowledged that more than 400 victims lost over $60 million as a result of his scam.  Chung was originally charged in 2009, but not extradited from South Korea until 2019.  USAO ND Cal

October 29, 2019

The co-defendant of a man recently sentenced for orchestrating the largest Ponzi scheme ever charged in Maryland has been sentenced to 14 years in prison and ordered to pay at least $189 million in restitution.  To facilitate the scheme to sell fake consumer debt portfolios, Jay Ledford create fake sales agreements, tax returns, and other documents to co-defendant Kevin Merrill, knowing they would be used to defraud investors.  When the two were arrested in 2018 with fellow co-conspirator Cameron Jezierski, the five-year scheme had already raked in over $396 million, with only 14% actually used to purchase consumer debt portfolios.  USAO MD

October 29, 2019

The orchestrator and four promoters of a pyramid and Ponzi scheme has been ordered to pay almost $11 million for defrauding at least 1,400 Spanish and Portuguese-speaking investors.  According to an earlier press release from the SEC, ringleader Daniel Fernandes Rojo Filho’s company, DFRF Enterprises, LLC, allegedly told investors that it operated more than 50 gold mines in Brazil and Africa.  In reality, the company did not actually mine gold and its $15 million in revenues came solely from recruiting new members as investors, with earlier investors paid commissions in a Ponzi-like fashion.  Filho alone will pay over $10 million of the monetary judgment; his four associates will each pay between $100,00 and $266,000.  SEC

October 15, 2019

Fabio Bretas de Freitas and Phy Capital Investments LLC have been ordered to pay approximately $23 million in penalties, restitution, disgorgement, and interest, for their roles in $7 million Ponzi-like scheme.  To carry out the scheme, Bretas and Phy falsely represented that they had developed propriety software capable of netting a 49% profit on futures trading.  In addition to the monetary penalty, Bretas awaits sentencing in a related case out of the US District Court for the Southern District of New York; Bretas and Phy are also permanently banned from trading in CFTC-regulated markets.  CFTC

October 10, 2019

A Maryland-based man has been sentenced to 22 years in prison for his role in a $396 million Ponzi scheme, the largest ever charged in Maryland.  Unbeknownst to hundreds of victim investors, the consumer debt portfolios they invested in through Kevin Merrill and co-conspirators Jay Ledford and Cameron Jezierski were fake, with Merrill, Ledford, and Jezierski going to great lengths to keep up the illusion.  The trio created imposter companies and bank accounts, fake documents, and invited would-be investors to tours of their Texas “office.”  By the time they were arrested in 2018, the scheme had raked in over $396 million, with another $260 million pending.  As part of his sentence, Merrill has also been ordered to pay restitution of at least $189 millionUSAO MD; SEC
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