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2010s
In 2010, Trevor Cook of Minnesota plead guilty and began serving a 25-year federal prison sentence in connection with the Oxford Group which reportedly took in $194 million. Bo Beckman still has charges pending in connection with the scheme.[91][92][93][94]
In early 2010, Tzvi Erez from Toronto, Canada scammed 76 creditors out of a combined $27 million. He created an illegitimate print business called E Graphix and convinced investors to give him large loans in order to carry out fictional printing orders. He was charged with fraud and forgery by Toronto police, but was not convicted because the Canadian courts lacked adequate trial time to give him a trial.[95][96]
On May 20, 2010, the SEC filed a federal case against Edward A. Allen and David L. Olson, two former brokers of World Financial Group / World Group Securities, accusing them of having raised approximately $14.8 million through the offer and sale of promissory notes as part of an illegal Ponzi scheme in the States of Ohio and Florida between September 2005 and December 2008.[97]
On June 15, 2010, the United States Securities and Exchange commission filed an enforcement action against Matt Jennings and his cohorts and accused them of running a Ponzi Scheme wherein they stole over $53 million from investors.[98] On December 12, 2012, the court appointed receiver for Westmore entities filed an action against Robert Jennings [99] for return of investor funds.[100]
In December 2011, film exhibitor Norman Adie pleaded guilty in U.S. Federal Court to running a Ponzi scheme in New York and Pennsylvania.[101]
In May 2012, Joseph Blimline was sentenced to 20 years in federal prison for operating two oil and gas Ponzi schemes. He operated a Ponzi scheme from 2003 to 2005 in Michigan, netting over $28 million. He then operated a Ponzi scheme in Texas, using a company called Provident Royalties, that lasted from 2006 to 2009 and netted over $400 million.[102]
On August 17, 2012, the SEC filed a federal case against defendants Paul Burks and Zeek Rewards, based out of North Carolina. Paul Burks ran the entity of Zeek Rewards, a fraudulent investment opportunity that promised investors returns as high as 1.5% per day by sharing in the profits of Zeekler, a penny auction. Investors were encouraged to recruit new members to increase their returns. New investors had to pay a monthly "subscription" of up to $99/month and an initial investment of up to $10,000. The higher the initial investment, the higher the returns appeared. The Zeekler entity was an online penny auction that served as a front for the Zeek Rewards entity. Investors in the Zeek Rewards scheme were promised payouts from the profits made on Zeekler by recruiting new members and giving out "bids" that customers would use on the penny auction. While the Zeekler website did bring in revenue, it was only about 1% of what investors believed was being brought into the Zeek Rewards company. The vast majority of dispersed funds were paid out from newly recruited investors. It is believed that the ponzi scheme was a $600M enterprise and the number of affected investors was 1 million when the SEC filed suit. This made Zeek Rewards the largest ponzi scheme in history by number of affected investors, even though numerous other ponzi schemes have had larger enterprise values. Paul Burks paid $4M to the SEC and agreed to cooperate. It remains unknown how much, if any, of the funds lost in the scheme will be returned to affected investors, as of August 2012.[103][104][105]
In August 2012, Trendon T. Shavers (aka “Pirate” and “pirateat40”), the founder and operator of "Bitcoin Savings and Trust" (BTCST),[106] a non existent company advertised over an internet forum, disappeared from the public scene. Shavers raised at least 700,000 Bitcoin in BTCST investments by running it as a Ponzi scheme. The fact that BTCST was run using Bitcoin, makes this a unique instance of a Ponzi scheme. It allowed Shavers to initially stay completely anonymous, making it possible for him to just disappear with the money from his investors. Although some called it a pyramid scheme, BTCST is generally considered a Ponzi scheme. At the time he disappeared, somewhere around August 31, the 700,000 BTC were valued at around US$4,500,000. However, since Bitcoin prices increased significantly since the time it happened, they could now be worth more than US$500 million. The SEC has charged Shavers with fraud.[106]
On September 5, 2012, the Economic Offences Wing of the Tamil Nadu Police arrested M S Guru, the mastermind of a 'contract emu farming' scheme for financial fraud and cheating over 12,000 investors. The filed cases alone amount to over $28 million.[107]
On October 1, 2012, a joint raiding operation was conducted on Genneva Malaysia Sdn Bhd and its affiliates by the Royal Malaysian Police, Ministry of Domestic Trade, Cooperatives and Consumerism, Companies Commission of Malaysia, and Bank Negara Malaysia. Singapore's Commercial Affairs Department has also conducted a similar operation against Genneva Pte. Ltd. in Singapore. Estimation of RM10 billion (close to US$330 million) filed cases.[108]
In April 2013, in Israel, Eran Mizrahi was convicted for multiple counts of fraud and money laundering and sentenced to 12 years[109][110][111] in a scheme which promised and investment in foreign-currency via Swiss banks, but in which outflows were paid from existing investor's funds which were also funneled to Mizrahi and his family.[citation needed]
In June 2013, in Tunisia, a fraud investment network collapsed when the master of a Ponzi scheme, Adel Dridi, tried to flee the country following government investigation with more than 80 million Tunisian dinars that he stole from around 50 thousand investors, many of whom claimed that they sold their possessions to enjoy the interests of Yosr development. Adel Dridi was arrested the day after he ran, and he is now being prosecuted. The company "Yosr Developpement Ltd" director was behind money laundry, illegal investments and Ponzi scheme frauds.[112]
On February 26, 2014, Gregory Loles, who formerly ran Farnbacher-Loles and related investment entities was sentenced to 25 years imprisonment by federal judge Alvin W. Thompson for a $25 million ponzi scheme resulting in several million dollars in losses.[113]
In June 2014, the Securities Exchange Commission alleged that Tom Abraham and Kenneth Grant their company KGTA Petroleum, Ltd., stockbrokers Jeffrey Gainer and Jerry Cicolani, and others orchestrated and/or helped promote a Ponzi scheme related to KGTA, a petroleum company that purported to earn profits by buying and reselling crude oil and refined fuel products. Grant and Abdallah were accused of having operated KGTA as a Ponzi scheme. The oil purchase orders never existed and KGTA did not sell fuel or oil to its purported buyers, according to the complaint. In classic Ponzi scheme fashion, KGTA allegedly used some of the funds raised from new investors to pay fake returns to earlier investors. The two men raised at least $20.73 million between October 8, 2012, and February of this year.[114] In October 2016, Grant, Abdallah, Jerry Cicolani, Jeffrey Gainer, Mark George, and Kelly Hood were sentenced to prison.[115]
In September 2014, the Securities Exchange Commission conducted an emergency asset freeze and filed civil fraud alleging that California-based company, Nationwide Automated Systems, Inc. (NASI), was operating a $123 million ATM ponzi scheme.[116][117]
In July 2015, a federal grand jury indicted Edwin Fujinaga, Junzo Suzuki and Paul Suzuki for operating a $1.5 billion Ponzi scheme. Fujinaga operated a company called MRI International Inc. in Las Vegas, Nevada. The company claimed that it collected medical accounts receivable at a discount and then collected the full amount from insurers. The victims were mostly Japanese citizens. Fujinaga and MRI were earlier found liable in a civil suit for $584 million.[118]
In October 2015, in Israel, Amir Bramly's Kela fund which offered fixed-interest investments supposedly for a low-risk "Capital Completion" strategy, went into liquidation proceedings before the Tel-Aviv district court after not meeting client outflow demands.[119] During the proceedings, more than 300 million NIS of unfulfilled debt, mostly from investors, were set before the court. In addition, the court appointed liquidator produced a report claiming that funds in the Kela fund were not actually used for "Capital completion", but rather funneled into Rubicon Business Group, and that in addition that funds were moved from Rubicon to Bramly and his family, due to which a court order prohibiting disposition of assets was placed on Bramly and members of his family.[120] As a result, the Kela fund, Rubicon Business Group, and a number of held companies were placed in permanent liquidation by the Tel-Aviv district court in January 2016[121] after the court determined that funds were inter-meshed between the companies, and that debts, mainly to investors, exceeded assets. In June 2016 Bramly was indicted for theft, fraud and laundering of more than 400 million NIS,[122][123] and Kela's investment recruiter Sivan Zibulski, as part of a plea bargain in which she will serve as a prosecutor's witness, was convicted and sentenced in January 2017.[124]
In June 2013, Brazilian Justice first blocked Telexfree Brazilian operations,[125][126] and in September 2015, convicted the company for operating a Ponzi Scheme.[127][128] Telexfree operations in US were shut down by SEC April 2014.[129][130] In October 2016, Telexfree co-owner James Merrill pleaded guilty.[131][132] Telexfree was a multibillion-dollar Ponzi scheme desguised as an internet phone service company. Prosecutors have described it as the largest fraud of all time in terms of the number of people affected - more than 1 million, with victims in various countries.[131]
In July 2016 the SEC obtained a Temporary Restraining Order against Traffic Monsoon LLC and its owner Charles Scoville, accusing him of operating a Ponzi Scheme and four counts of Fraud [133]
In October 2017, authorities charged Michael Scronic of Pound Ridge, New York with criminal and civil charges, alleging that he lost or spent all but about $27,000 of the $21.8 million he told investors in his hedge fund he had.[134]
In December, 2017, the Woodbridge Group of Companies was charged as an allegded $1.2 Billion US Dollar Ponzi scheme run by real estate developer Robert H. Shapiro (not to be confused with Attorney Robert L. Shapiro) by The U.S. Securities and Exchange Commission (SEC). On December 4, 2017, Woodbridge and 236 related limited liability companies Woodbridge formed filed for Bankruptcy in the Delaware Federal Court. [1] The Woodbridge Group of Companies filed for bankruptcy amid the departure of its chief executive and an investigation into potential securities fraud linked to $1 billion in investments. The Chapter 11 filing on Monday in U.S. Bankruptcy Court in Wilmington, Delaware, cited “unforeseen costs associated with ongoing litigation and regulatory compliance.” The SEC had been probing whether Woodbridge defrauded investors who invested more than $1 billion. The agency also sought more information on about 236 limited liability companies Woodbridge formed, according to an October SEC court filing. [2] On December 21, 2017 the U.S. Securities and Exchange Commission said it had sued luxury real estate developer Shapiro and his Woodbridge Group of Companies for allegedly operating a $1.2 billion Ponzi scheme targeting thousands of investors. According to the SEC’s complaint, Shapiro ran a “sham” business model that allegedly defrauded more than 8,400 investors, including many elderly, in unregistered Woodbridge funds. It said Shapiro promised 5 to 10 percent annual interest on money he said would be used for loans to commercial property owners paying 11 to 15 percent interest rates. “Mr. Shapiro is cooperating with the bankruptcy to protect the assets held for the benefit of Woodbridge’s stakeholders,” Ryan O’Quinn, a lawyer for Shapiro, said in e-mail. “He denies any allegation of wrongdoing and looks forward to his opportunity to defend himself in a court of law.” [3]
On January 16th, 2018, the cryptocurrency token "Bitconnect" (BCC) plummeted in value after from a high of $331 to $21 within six hours, its market cap declined from a high of $2 billion to $130 million. Bitconnect, which promised 1% daily returns through a "crypto-currency trading bot" was forced to close. The scheme also had a particularly lucrative affiliate program, which promoted users to lure others into the scheme, ultimately leading to lack of new users and collapse in the value of Bitconnect tokens.
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