Ponzi Schemes

What Keeps a Ponzi Scheme Running?

August 30, 2016 | Silver Law Group

What Keeps a Ponzi Scheme Running? on silverlaw.com

You would think that it would be easy to spot a Ponzi scheme when there are so many victims, but the truth is a lot more complicated

Ponzi schemes are fraudulent investment schemes that involve paying fake investment returns with funds contributed by new investors. Organizers of Ponzi schemes often promise investors incredibly high returns with little to no risk, paying them from funds invested by new victims.

One of the most famous Ponzi schemes in history was run by Bernie Madoff, who made $50 billion during a decades-long scheme. Investigators have found evidence that it began in the 1970s, yet charges weren’t brought against Madoff until his arrest in 2008.

Silver Law Group Retained by a Court Appointed Corporate Monitor to Pursue Claims Against a Large Broker-Dealer and Clearing Firm

April 27, 2016 | Silver Law Group

Pursuant to a civil action brought by an aggrieved investor against OM Investment Management (“OMIM”), an investment adviser, and its managing member Gignesh Movalia (“Movalia”) in Miami-Dade County, Florida, the Court appointed a Corporate Monitor to “discover, marshal and preserve funds and assets derived from investors.” In turn, the Corporate Monitor has retained Silver Law Group to pursue claims against a large national broker-dealer and clearing firm that allegedly provided the platform for Movalia and his company OMIM to perpetrate a Ponzi scheme.

Silver Law Group recently filed a FINRA arbitration against a large national broker-dealer and clearing firm (collectively the “Respondents”) seeking over $1 million dollars in damages. The arbitration claim alleges that the Respondents permitted Movalia, who has been criminally convicted of securities and investment fraud, and OMIM to cloak their activities with an air of legitimacy by aligning themselves with and using the name and reputation of the Respondents to attract investors. The arbitration claims that Respondents failed to act on red flags concerning the misconduct of Movalia and OMIM and that the Respondents also failed to alert individual clients of Respondents of what they had uncovered as a result of a customer complaint. Specifically, after receiving the customer complaint, the Respondents investigated the situation and decided to cancel their relationship with Movalia and OMIM. However, at no time did Respondents alert its customers of the concerns which permitted the fraud to go unabated until the appointment of the Corporate Monitor.

Silver Law Group has been retained by receivers and corporate monitors to assist in the recovery of losses due to investment fraud or Ponzi schemes. Silver Law Group continues to represent the interests of investors who have been the victims of investment fraud or Ponzi schemes. If you have questions about your legal rights pertaining to your investments or believe you have been a victim of fraud, please contact the attorneys of the Silver Law Group for a free consultation toll free at (855) 755-4799 or ssilver@silverlaw.com.

SEC Charges Mark A. Jones with Operating $10 Million Ponzi Scheme that Claimed to Offer Loans to Jamaican Businesses

March 28, 2016 | Silver Law Group

The U.S. Securities and Exchange Commission (SEC) has charged former Boston resident, and current Miami resident, Mark A. Jones with operating a $10 million Ponzi scheme that claimed to generate profits from “bridge loans” to Jamaican businesses.

According to the SEC’s Complaint — filed earlier this month in federal court in Boston — Mr. Jones began soliciting investors in 2007 and said their money would be pooled and used for “bridge loans” to Jamaican businesses awaiting funds from approved commercial bank loans. Mr. Jones purportedly told the investors that the loans would generate approximately 15 to 20 percent interest each year. He appeared in YouTube videos promoting investment opportunities in Jamaica and even met with some investors in Jamaica to show them local projects in which their funds were purportedly invested. Contrary to those representations, though, the SEC alleges that Mr. Jones was actually using investors’ money to pay other investors — the hallmark of a Ponzi scheme. In addition, Mr. Jones is alleged to have used some of the invested funds for his own personal use. In all, Mr. Jones raised about $10 million from at least 21 investors in several states and Washington, D.C., including some of his own relatives. Targeting investors from the same community or religious group is generally referred to as affinity fraud.

The SEC has obtained a Court order freezing Mr. Jones’ assets and an order to repatriate investor funds that were moved overseas. In addition, the SEC is seeking a permanent injunction, return of allegedly ill-gotten gains with interest, and other monetary penalties. Mr. Jones is also being criminally prosecuted by the U.S. Attorney for the District of Massachusetts for his actions.

Silver Law Group Investigates CONCERT Wealth Management, Summit Advisor Solutions, Private Advisory Group and other RIAs who Sold Aequitas Securities Amidst SEC Allegations of it Running a “Ponzi-like” Scheme

March 16, 2016 | Silver Law Group

Silver Law Group is investigating numerous registered investment advisors (“RIAs”) connected to Oregon-based Aequitas Management, LLC’s (“Aequitas”) “Ponzi-like” scheme and $350 million of investor losses.

On March 10, 2016, the Securities and Exchange Commission (“SEC”) filed a complaint against Aequitas and its various subsidiaries. The complaint’s most damning allegations include Aequitas defrauded over 1,500 investors nationwide between Jan. 2014 and Jan. 2016 of more than $350 million as a last-ditch effort to raise funds to save it from complete financial collapse. This “Ponzi-like” scheme defrauded investors while the most senior executives used the investments to fund their lucrative salaries and extravagant company perks, according to the complaint.

According to news reports, numerous RIAs have been connected with the fraudulent Aequitas, including:

Former Smith Barney, Raymond James, and Morgan Keegan Broker Claus Foerster Indicted for Fraud

March 14, 2016 | Silver Law Group

A grand jury of the U.S District Court in Spartanburg, S.C. indicted former broker Claus C. Foerster (CRD# 1912949) for defrauding clients of $2.8 million over a 14-year period.

Foerster perpetrated the fraud from 2000 to June 2014 while employed as a financial advisor at Smith Barney & Co., Morgan Keegan & Co. and Raymond James Financial Inc., according to an indictment filed March 8, 2016 in the U.S. District Court in Spartanburg, S.C.

The charges follow the Financial Industry Regulatory Authority Inc.’s 2014 decision to bar Foerster from the brokerage industry due to allegations that he was running a Ponzi scheme.

FINRA Permanently Suspends New York Broker Frederick Monroe for Misappropriating Funds

January 10, 2016 | Silver Law Group

FINRA Permanently Suspends New York Broker Frederick Monroe for Misappropriating Funds on silverlaw.com

Theft of client funds exceeds $1 million in elaborate Ponzi scheme spanning a 20-year career in the securities industry

According to FINRA records, Frederick Monroe, an investment broker based in Albany, NY, has been permanently suspended as a broker and was arrested in June 2015 after being charged with theft of over $1 million dollars in investor funds.

Monroe has been in the investment business for more than 20 years and has been registered with companies including Voya Financial Advisors (2006-2015), Northwestern Mutual Investment Services (1994-2006) and the Robert W. Baird & Company (1994-2002).

Why South Florida is a Target for Ponzi Schemers

December 20, 2015 | Silver Law Group

Why South Florida is a Target for Ponzi Schemers on silverlaw.com

Learn what to look for to avoid being swindled by a Ponzi scheme in South Florida

A Ponzi scheme is a type of investment fraud that is directed by a single individual who creates an entire scheme that hinges on new investment funding being used to pay existing investors. As long as new investors are plentiful, the scheme can work and the orchestrator can benefit financially for years. Ponzi schemers generally urge investors to promote the investors preying on whole communities, religious institutions and similarly situated people.

Some of the most elaborate and successful Ponzi schemes have spanned decades (Bernie Madoff was engaged in fraudulent activities for at least 20 years). But once new investors dry up, the investment scheme quickly collapses and numerous investors lose large sums of money.

The Psychology of a Ponzi Schemer

December 13, 2015 | Silver Law Group

The Psychology of a Ponzi Schemer on silverlaw.com

How can one person take advantage of so many? And is it possible to identify one before you hand over your money?

You hear about Ponzi schemes on the news and wonder how so many people could fall for such and old trick. But behind each Ponzi scheme is always a villain, a person who has orchestrated the entire scam who literally holds all of the power in his/her hands. What goes on in their minds? And how do they take advantage of so many people?

Here are some characteristics that link the psychology of many Ponzi schemers:

Silver Law Group Investigates Global Financial Fund 8 LLP and Transglobal Financial Services

October 10, 2015 | Silver Law Group

Silver Law Group is investigating Bruce Kane, 60, formerly of Ithaca, New York and currently residing in Fort Lauderdale, FL; Burton Greenberg, 75, of Plantation, Florida; and Senol Taskin, 50, of Ontario, Canada for their alleged involvement in an investment scheme that defrauded investors out of $10 milion. All three men have been indicted by a federal grand jury in upstate New York on wire fraud charges. Kane and Greenberg were both arrested by the Federal Bureau of Investigation (FBI) in Florida earlier this week, while Taskin remains at-large and is believed to be living in Turkey.

According to the federal indictment, Kane — an accountant and the principal of a Florida-based investment partnership named Global Financial Fund 8 LLP — conspired with Greenberg — the President and CEO of both Transglobal Financial Services and M&P Global Financial Services Inc. — and Taskin to solicit investment funds that investors were told would be safely invested and held in American, Canadian, and Italian banks where they would generate significant profits as high as a 960 percent return on investment. Instead of investing the money in secure investments, the trio allegedly used the funds to pay off personal debts, pay rent on a waterfront condominium in South Florida, buy a boat, and make separate investments of their own. To avoid detection, Kane and Greenberg purportedly sent investors phony “profit” payments which were nothing more than partial returns of their principal investments. Additionally, Kane and Greenberg repeatedly assured investors by e-mail between 2004 and 2013 that their investments were secure and profitable, despite Kane and Greenberg allegedly knowing those assurances to be false. To assist in the conspiracy, Taskin purportedly provided Kane and Greenberg a phony Canadian bank statement to use at a meeting with investors so the investors would be lulled into believing their investments were secure when those funds had actually been transferred to a company co-owned by Taskin and used for his own personal or corporate purposes.

As set forth in court documents, Kane, Greenberg, and Taskin used over $6.1 milion of the funds for their own benefit — over $4.4 million of the money was diverted to bank accounts and companies controlled by Greenberg or his close relatives; approximately $1.6 million of the money went to Kane’s personal accounts and to pay for personal expenses of his such as credit cards, automobile and lease payments, and a boat and waterfront condominium he owned; and at least $240,000 of the victim investors’ funds were transferred to bank accounts in Turkey controlled by Taskin.

SEC Alleges Broker William Quigley Schemed to Defraud Investors

October 1, 2015 | Silver Law Group

Quigley and his two brothers are accused of running a fraudulent offering scheme

After a 24-year career in the securities industry checkered with allegations of misconduct and unauthorized trading, broker William Quigley has not only been barred permanently by FINRA, he also faces fraud charges brought by the SEC.

According to the SEC administrative proceeding, the SEC “deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be…instituted” against Quigley. It is alleged that William Quigley, along with his two brothers, Michael Quigley and Brian Quigley misappropriated investor funds from 2003 through 2012.