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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 9, 2021

The Alista Group, LLC, and Luis M. Pineda Palacios, a/k/a Luis Pineda, have been ordered to pay civil monetary penalties and restitution in an action initiated by the CFTC alleging that they engaged in precious metals fraud and illegal, off-exchange precious metals sales to retail customers.  In addition, the government alleged that defendants misappropriated customer funds to trade on their own account, pay business expenses, and make payments to customers to sought to cash out.  Alista was ordered to pay a total of $2.2 million, and Pineda was ordered to pay $448,000. CFTC

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

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 commodities trading and registering as a futures commission merchant.  CFTC

April 7, 2021

A default judgment was ordered against Negus Capital Inc. and its principal Aaron Butler, based on charges of commodity pool fraud in connection with binary options trading.  The order finds that defendants unlawfully solicited  the public to trade binary options contracts on the North American Derivatives Exchange, defrauded 70 customers who sent in nearly $300,000, misappropriated customer funds, and operated as an unregistered commodity pool operator. In addition to restitution, defendants were ordered to pay civil penalties of nearly $900,000.  CFTC

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...
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