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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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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

November 30, 2020

An attorney in Pennsylvania who defrauded his own clients through a $2.7 million Ponzi scheme has been sentenced to 6.5 years in prison and ordered to pay over $2.1 million in restitution and $273,091 in forfeiture.  In pleading guilty earlier this year, Todd Lahr admitted to soliciting investments from his clients for business opportunities that didn’t actually exist—including property leases in Europe and mining operations in Papua New Guinea—and then using the money that he didn’t spend on personal expenses to pay prior investors.  The monetary penalty in this criminal action will be offset by the final judgment obtained by the SEC in June; in the parallel civil action with the SEC, Lahr was ordered to pay over $1.1 million in disgorgement and pre-judgment interest.  DOJ; USAO EDPA

October 22, 2020

The former president of Hightower Capital Group (HCG) has been sentenced to nearly 16 years in prison and ordered to pay $9.6 million in restitution for running a Ponzi scheme that harmed investors, mostly family and friends, from 2013 to 2018.  Though barred from working as a broker in 2015, William Hightower managed to convince the investors to trust him with their retirement funds and life savings, which he then used to pay other investors and fund a lavish lifestyle for himself.  USAO SDTX

October 19, 2020

Investment adviser representative Paul Horton Smith, Sr. of eGate, LLC and his companies, Northstar Communications, LLC and Planning Services, Inc., have been ordered to pay over $4 million in disgorgement and $383,000 in prejudgment interest for defrauding at least 35 investors of more than $5.6 million.  According to the SEC, Horton and his companies targeted retirees and pre-retirees in Southern California, promising them guaranteed interest payments but paying the “interest” with new investor funds.  SEC

July 28, 2020

Savraj Gata-Aura, a British citizen, has been sentenced to four years in prison and ordered to forfeit nearly $3 million for his role in a massive Ponzi scheme involving coworking space Bar Works that defrauded over 800 investors of more than $40 million.  Together with fellow British citizen Renwick Haddow—who was widely reported to be disqualified from serving as the director of a U.K. company and was managing Bar Works under the alias “Jonathan Black”—Gata-Aura solicited investors by making material misrepresentations about Bar Works’ management and the company’s financial condition.  Haddow is due to be sentenced later this year.  USAO SDNY

July 10, 2020

A 70-year-old man in North Carolina who pleaded guilty to orchestrating a $22 million Ponzi scheme through his company, Oodles Inc., has been sentenced to 17.5 years in prison and ordered to pay $17 million in restitution.  Hal H. Brown Jr. singlehandedly defrauded at least 60 victims—including family, friends, neighbors, and fellow church members—by falsely representing that Oodles owned hundreds of millions of dollars in rights to religious-themed family shows and movies.  To bolster his claims, Brown developed marketing material, falsified bank statements and company agreements, and impersonated employees of media companies.  USAO WDNC

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
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