Ponzi Schemes

February 8, 2016

4X Solutions, Inc. and its principal, Whileon Chay, both of New York City, were ordered to pay over $10 million in penalties and disgorgement in connection with a foreign currency Ponzi scheme.  CFTC

December 1, 2015

The SEC charged “Bitcoin mining” companies GAW Miners andZenMiner, and their founder, Homero Joshua Garza, with conducting a Ponzi scheme to defraud investors.  Bitcoin “mining” means to apply computer power to complex equations that verify a group of transactions in a virtual currency.  The first computer to solve an equation is awarded new units of the virtual currency.  The SEC’s complaint alleges that Garza, through GAW Miners and Zen Miners, purported to offer shares of a digital Bitcoin mining operation.  In reality, the companies did not own enough computer power for the mining it promised to conduct.  Therefore, most investors paid for a share of computing power that never existed.  Returns paid to some investors came from proceeds generated from sales to other investors.  SEC

August 3, 2015

Houston businessman, Frederick Alan Voight, settled charges by the SEC that he operated a $114 million Ponzi scheme.  The SEC’s case charged Voight with defrauding more than 300 investors in multiple offerings of promissory notes issued by two partnerships he owns.  Voight has agreed to an asset freeze and to pay civil penalties and return allegedly ill-gotten gains in an amount to be set later by the court.  SEC

July 6, 2015

The SEC charged Bay Area oil and gas company, Luca International Group, and its CEO, Bingqing Yang, with running a $68 million Ponzi-like scheme and affinity fraud that targeted the Chinese-American community in California and investors in Asia, including some solicited as part of the EB-5 Immigrant Investor Program.  SEC

June 1, 2015

The SEC charged Miami investment adviser Phil Donnahue Williamson with running a Ponzi scheme under which he siphoned money from his Sterling Investment Fund and defrauded investors, including several local teachers and law enforcement officers.  SEC

April 7, 2015

The SEC announced fraud charges against former professional football player William D. Allen and his business partner Susan C. Daub and others, alleging they operated a Ponzi scheme that raised more than $31 million from investors who were promised profits from loans to professional athletes.  SEC

February 27, 2015

The SEC charged purported venture capital fund manager Gregory W. Gray Jr. and his firms Archipel Capital LLC and BIM Management LP with fraudulently using money from three investment funds to pay fictitious returns to investors in a different fund.  SEC

February 18, 2015

The SEC announced fraud charges and an emergency asset freeze against two operators of a Colorado-based pyramid and Ponzi scheme that promises investors extraordinary returns of 700 percent through a purported “triple algorithm” and “3-D matrix.”  According to the government, Kristine L. Johnson and Troy A. Barnes raised more than $3.8M since April 2014 from investors they enticed into buying positions in their company Work With Troy Barnes Inc. (d/b/a “The Achieve Community”) when their company had no legitimate business operations and they were merely paying purported investment returns to earlier investors.  SEC

January 21, 2015

The SEC announced fraud charged and an asset freeze against Fort Lauderdale, Florida-based investment advisory firm Elm Tree Investment Advisors LLC, and its founder and manager Frederic Elm, in a scheme that raised more than $17M since November 2013.  According to the SEC, Elm and his company misled investors and used most of the money raised to make Ponzi-like payments to the investors while treating the funds as a “personal piggy bank,” to purchase a $1.75M home, luxury automobiles, and jewelry, and to cover daily living expenses.  SEC