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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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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

SEC Chairman Views Cryptocurrency Markets as the “Wild West” and Calls for More Investor Protection

Posted  08/13/21
By Carolina Gonzalez
Cryptocurrency and US Hundred Dollar Bills Scattered Around
During a recent speech discussing the intersection of national security with cryptocurrencies at the Aspen Security Forum, Gary Gensler, the new Chairman of the Securities and Exchange Commission (SEC), made clear the SEC will use its broad powers to continue protecting investors from the volatility associated with cryptocurrency markets which he characterized as the “Wild West.”  He also urged Congress to grant...

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

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

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

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

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

How will regulators respond to Bitcoin’s price fluctuations?

Posted  05/18/21
By Sarah “Poppy” Alexander
Bitcoins stacked with stocks rising
The price of Bitcoin—never stable—has become even more erratic in the last month.  From April 17 to May 17, the price fell 26%.  Such a huge drop would be noteworthy in a stock investment.  But in something claiming to be a currency, that kind of instability is normally only seen in times of crisis and hyperinflation.  Coming just as cryptocurrencies are making a play to be considered mainstream, this latest...

April 27, 2021

The owner of BMC Worldwide, Inc., which did business as Blue Moon Coins, Aaron Michael Scott, has agreed to an order for restitution of $1.4 million to customers who sent him funds for the purpose of purchasing gold and silver based on his false representations that he and BMC were a successful precious metals firm with an inventory of precious metals.  In fact, the defendants had no such inventory, and misappropriated customer funds for their own purposes.  Scott previously pleaded guilty to wire fraud and was sentenced to four years in prison.  CFTC
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