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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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Catch of the Week: Fraud Behind the Silver Screen

Posted  04/9/21
Canisters of movie film rolled out
This week the SEC announced that it obtained an emergency asset freeze in an enforcement action against L.A.-based actor Zachary Horwitz and his company 1nMM Capital, LLC for allegedly running a $690 million Ponzi scheme.  In its complaint, the SEC claimed Horowitz’s recent actions threatened to dissipate the remaining investor funds in his possession. While this story is still technically “mid-catch,” the...

April 8, 2021

Circle Society, Corp. and its owner, David Gilbert Saffron, have been ordered to pay more than $32 million in restitution, disgorgement, and civil monetary penalty for cryptocurrency fraud and misappropriation.  First as an individual, and then through Circle Society, Saffron allegedly solicited millions in Bitcoin and U.S. dollars from at least 179 individuals by making false statements regarding his trading expertise and guaranteed rates of return.  However, rather than trading the fu­nds on foreign currencies and cryptocurrency pairs, Saffron directed­­ portions to his personal cryptocurrency wallet and used other portions to pay prior investors.  CFTC

April 8, 2021

Posted  04/8/21
A man in New Mexico has been ordered to pay over $10.3 million in monetary sanctions and relief after he admitted to running a Ponzi scheme that spanned nearly twenty years.  Instead of investing client funds in U.S. Treasury Bond futures, Douglas Lien misappropriated over $14.2 million from 45 clients, while charging them over $3.5 million in so-called management fees.  Lien has now been permanently banned from...

CFTC Clobbers Cryptocurrency Con Man

Posted  04/1/21
By Leah Judge
cryptocurrency scam
Last week, the CFTC announced that a federal court entered a nearly $600 million default judgment against a British man who used bitcoin to defraud more than 1,000 people worldwide.  The judgment is yet another indication that the CFTC will vigorously police cryptocurrency fraud.

The Scam

The CFTC filed a complaint against Benjamin Reynolds and his bitcoin trading and investment company, Control-Finance, back in...

Catch of the Week: The Long Tail of an Infamous Ponzi Scheme

Posted  02/26/21
gavel with handcuffs and money scattered around
In 2012, R. Allen Stanford, former head of Stanford International Bank (SIB), was sentenced to 110 years’ imprisonment for masterminding a massive Ponzi scheme through which he misappropriated $7 billion from bank customers.  That scheme had been running for twenty years when it was shut down in 2009. Now, in February 2021, ten years after Stanford’s conviction and thirty years after his scheme began, the...

February 24, 2021

Leroy King, the former chief of Antigua’s Financial Services Regulatory Commission, was sentenced to 10 years in prison for his role in obstructing the SEC’s investigation into the $7 billion Ponzi scheme perpetrated by R. Allen Stanford and the Stanford International Bank.  Stanford provided King with cash and luxury gifts, and in exchange King improperly denied his agency’s assistance to the SEC.  DOJ

February 5, 2021

Private equity fund ACP X, LP, its manager Laurence Allen, and other corporate entities owned and controlled by Allen including NYPPEX Holdings, LLC, have been ordered to pay nearly $7 million.  Allen allegedly used investor funds to pay himself and others exorbitant salaries and cover the expenses of Allen’s affiliated entities, contrary to representations to investors.  A receiver was appointed to wind down the fund.  NY

Top Ten Financial and Healthcare Fraud Prison Sentences of 2020

Posted  01/27/21
Hands in handcuffs behind back of white man in business suit
Individuals involved in financial and healthcare fraud schemes face not just civil liability, but also criminal penalties – including prison time. In 2020, the Department of Justice obtained substantial prison sentences in a myriad of cases involving healthcare and financial frauds, many of which involved convictions of the type of fraudulent schemes that whistleblowers report. Whistleblowers play an essential role...

January 11, 2021

Steve Chen was sentenced to 10 years in prison following his guilty plea to charges arising from his promotion of a pyramid/Ponzi scam that netted $147 million from tens of thousands of investors.  Chen told victims that they could purchase interests in U.S. Fine Investment Arts, Inc. and other companies owned by him, falsely claiming that those companies mined and sold amber and other gemstones, and enlisted those investors to recruit others by awarding them bonuses and “Gem Coins” that he claimed were a digital currency.  USAO CD Cal

December 9, 2020

A man in Washington D.C. who ran a fraudulent diamond investment Ponzi scheme has been sentenced to 7 years in prison and ordered to pay $23 million in restitution to victims throughout the United States and Canada who were told their funds would be used to purchase rough diamonds that would be cut, polished, and resold at a profit.  To lure investors to the scheme, Jose Angel Aman and his co-conspirators promised that the investments were secured by Aman’s inventory of diamonds, allegedly valued at $25 million.  In fact, there was no $25 million inventory of diamonds, and the funds were used for interest payments to earlier investors and to pay Aman and his co-conspirators.  USAO SDFL
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