Ponzi Schemes

Winsome Investment Trust, U.S. Ventures LC, and their Individual Owners Assessed $44 Million Sanction for Commodity Pool Fraud and Misappropriation

July 2, 2014 | Silver Law Group

The U.S. Commodity Futures Trading Commission (CFTC) has obtained a federal court Order imposing $44 million in sanctions against Robert J. Andres of Houston, TX; his company, Winsome Investment Trust (“Winsome”); Robert L. Holloway of San Diego, CA; and his company, US Ventures LC (“US Ventures”); for fraud in operating a commodities futures pool. The sanction includes a civil monetary penalty of over $32 million as well as a restitution award of $12 million to be paid to defrauded investors. The Order also imposes upon the individuals and companies a permanent trading and registration ban.

According to the Order entered by the Honorable Bruce S. Jenkins of the U.S. District Court for the District of Utah, Andres and Winsome (from May 2005 through November 2008) fraudulently solicited and accepted over $50 million from investors who were told that they would be investing in a commodity futures pool operated by Holloway and US Ventures. To garner the investors’ funds, Andres and Winsome purportedly made false statements claiming that the investment program had a successful track record and that each investor would be guaranteed a return of his/her principal plus profits. The Court found those representations to be false, as Holloway and US Ventures’ futures trading actually suffered nearly $11 million in net losses.

The Court went on to conclude that the defendants misappropriated the majority of participant funds to pay investors false “profits” in a manner akin to a Ponzi scheme and that the defendants used investor funds for other improper purposes, such as providing money to Andres’ wife, funding Holloway’s and his wife’s lavish personal expenses (houses, cars, jewelry, etc.), and investing in various unrelated and undisclosed businesses including a business Holloway’s wife ran on eBay. The Court Order explained that Andres and Holloway attempted to conceal the fraud by directing employees to falsify participants’ account records and to falsely represent to investors that the pool funds were trading profitably with virtually no losses during the relevant period.

SEC Charges Investment Advisor with Improperly Raising Funds for Ponzi Scheme

May 28, 2014 | Silver Law Group

The U.S. Securities and Exchange Commission (“SEC”) continued its onslaught against Scott Rothstein associates earlier this month when it filed suit in federal court against Barry R. Bekkedam (“Bekkedam”), Chairman and Chief Executive Officer of investment advisory firm Ballamor Capital Management (“Ballamor”). The SEC suit follows a growing number of SEC actions against individuals and corporations accused of providing investor funds and assistance to convicted South Florida Ponzi-schemer Scott Rothstein.

The SEC alleges that Bekkedam, through Ballamor, solicited his clients and other prospective investors to invest $100 million into the Banyon Income Fund (“Banyon Fund’”), an enormous hedge fund that primarily financed Rothstein’s Ponzi-scheme operations. The Banyon Fund was created by Bekkedam and Rothstein investor George Levin to solicit additional funds for Rothstein and, the SEC alleges, bolster Ballamor’s business and protect Levin’s multi-million dollar investments with Rothstein.

In seeking disgorgement and civil penalties against Bekkedam, the SEC details allegations of Bekkedam’s material misstatements and omissions to his customers in connection with the Banyon Fund, as well as misrepresentations about his dealings with George Levin, which the SEC alleges were quid pro quo for Bekkedam’s securing investments in the Banyon Fund. The SEC also alleges numerous securities law violations.

CFTC Shuts Down another Florida Ponzi Scheme

April 7, 2014 | Silver Law Group

In March 2014, the U.S. Commodity Futures Trading Commission (CFTC) obtained a supplemental Federal Court Order against Queen Shoals Consultants, LLC (“QSC”) and others to jointly pay in excess of five million dollars in penalties for defrauding customers in a currency or Forex trading scheme. None of the Defendants were registered with the National Futures Association or the CFTC. The Judge initially entered a permanent injunction finding that the Defendants defrauded customers in the Forex scheme and ordered the Defendants to pay restitution, amongst other sanctions.

According to a Court Order, a website “lured customers by claiming QSC and others had a ‘vast background in financial services’ with over 20 years of experience in financial services and a staff of experts ready to assist customers.” In truth, the Defendants were not experienced Forex traders and any promises or guarantees about profits were not true. In fact, there were no Forex accounts and the investors were the victim of a Ponzi scheme.

If you have been the victim of a Forex or commodities trading scheme and would like to discuss your legal rights, contact the Silver Law Group. We represent investors on a contingency fee basis in FINRA arbitration, NFA arbitration and state or federal court. Please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or Toll Free at (855) 755-4799.