Ponzi Schemes
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November 29, 2021
Denari Capital LLC and its principals Travis Capson and Arnab Sarkar have been ordered to pay a total of $4 million in penalties and restitution based on findings that they engaged in foreign exchange (forex) pool fraud and failed to register with the CFTC as a commodity pool operator and associated persons. Defendants misrepresented Denari’s trading and performance in fraudulent solicitations, issued false account statements, and improperly commingled pool funds. CFTCNovember 24, 2021
Guy Scott Griffithe, who controlled an entity called Renewable Technologies Solutions, Inc., and Robert William Russell, who owned an entity called SMRB, LLC, have been ordered to pay more than $6 million to resolve charges that they mislead investors by falsely stating that investments in Renewable would be used to operate SMRB, which held a license to grow marijuana under Washington’s recreational cannabis laws. To create the illusion that the marijuana business was profitable and paying dividends as promised, Griffithe allegedly paid out purported profit distributions to some investors, which were partially funded in a Ponzi-like fashion using funds from other investors. Griffithe was found liable for more than $5.3 million in disgorgement, prejudgment interest, and civil penalties; Russell was found liable for more than $698,000 in disgorgement, prejudgment interest, and civil penalties. SECNovember 9, 2021
The owner of California-based DC Solar, Jeff Carpoff, has been sentenced to 30 years in prison for his role in a billion-dollar Ponzi scheme, the largest criminal fraud scheme ever prosecuted in the Eastern District of California. Together with his wife Paulette and five other co-conspirators, Carpoff lied to investors about market demand for his company’s mobile solar generator (MSG) units, using false lease contracts and financial statements to back up the lie. In addition to selling thousands of MSGs that didn’t even exist, the defendants paid prior investors using funds from newer investors, then laundered their ill-gotten gains. USAO EDCA; Add'l defendant sentencing at USAO EDCAOctober 20, 2021
Following his conviction at trial, investment manager Shawn Baldwin has been sentenced to 17 years in federal prison on investment fraud charges. Baldwin, who had been previously disciplined by authorities, solicited investors with claims that overstated his credentials and misrepresented that their funds would be used to invest in stocks and other investment products. In fact, Baldwin used most of the investors’ funds for his own personal benefit. USAO ND ILAugust 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. CFTCSEC Chairman Views Cryptocurrency Markets as the “Wild West” and Calls for More Investor Protection
Posted 08/13/21
