Articles Tagged with Ponzi Scheme

LPL terminated financial advisor Dain F. Stokes on August 28, 2019 for selling unregistered promissory notes to clients that purported to invest in a project in Africa allegedly sponsored by Taylor Swift. According to InvestmentNews, Stokes converted at least $576,000 from two clients, whom he solicited to invest in this phony charity project, which he sold as being created by Swift to help needy people in Africa. Stokes claimed to have a close relationship with Swift, telling clients that she personally hired him to manage the finances of the Africa project and to promote a new song release by her in June 2019. He also told clients that Bill Gates was involved in the project.

The State of New Hampshire Department of State Bureau of Securities Regulation filed a petition and order against Stokes after an investor (“Investor #1”) invested $201,000 in the Africa Project between August 1, 2018 and January 25, 2019. Stokes used promissory notes to facilitate these investments. According to the promissory notes, Investor #1 would receive the return of his entire principal plus 20% interest by making this investment. Payment on the first promissory note was initially due by November 8, 2018, however the due date was continually pushed back by Stokes. At one point, he even told his client that President Donald Trump allegedly froze his assets. Stokes was ordered to pay $201,000 plus interest in restitution to Investor #1 and a $20,000 fine for violating New Hampshire Blue Sky Laws, which prohibit the fraudulent sale of securities (RSA 421-B:5-501) and the sale of unregistered securities (RSA 421-B:3-301(a)). To date, a second investor who invested $375,000 has come forward.  The New Hampshire Department of State Bureau of Securities Regulation has since frozen Stokes’ assets and issued an injunction prohibiting him from speaking with those who invested in this scam.

New Hampshire authorities interviewed Stokes, who refused to provide any details about the African charity, claiming that all information, including the name, was privileged. He also refused to reveal whether the checks, which were made payable to him personally, were invested in his personal accounts.

If you lost money with Puerto Rico financial advisor Pedro Gonzalez-Seijo, Stoltmann Law Offices may be able to help you recover these losses. Gonzalez-Seijo, a registered representative of Transamerica Financial Advisors, Inc. from September 1991 through May 2016, solicited clients to purchase variable annuities, but instead deposited their money into his personal bank account. The Securities and Exchange Commission barred Gonzalez-Seijo from the securities industry on July 5, 2019. Through its investigation, the SEC found that he stole $480,813.15 from five clients between 2013 and 2016. He pled guilty to one count of bank fraud in the criminal action that was pending against him in the United States District Court for the District of Puerto Rico on January 31, 2019.

Rather than terminate Gonzalez-Seijo, Transamerica gave him a slap on the wrist when they discovered “unauthorized check withdrawals” in client accounts and permitted him to resign. He did not register with any other broker dealer after resigning from Transamerica in May 2016 and, given the bar imposed by the SEC last week, he will no longer be allowed to work in the securities industry in any capacity. According to his FINRA BrokerCheck Report, Gonzalez-Seijo also sold life insurance and annuities through PGS Insurance, Inc. There are two client complaints disclosed on his BrokerCheck report for this scheme, one has been closed and one is pending.

Stoltmann Law Offices is highly experienced in representing investors who lost money in similar theft and selling away, or “Ponzi” schemes. You can find information on just a few of those cases in which Stoltmann Law Offices successfully recovered their clients’ stolen assets, and in some cases attorney’s fees, costs, interest and punitive damages on our website. “Selling away” is when a broker sells an investment to clients that is either unregistered, or not approved by the brokerage firm. Common forms of these alleged investments are promissory notes, bonds, and limited partnerships. Often times the advisor uses a shell company to misappropriate client funds. In some cases the advisor will even represent that he is investing the money in publicly traded stocks and mutual funds and will go as far as creating phony account statements to hide the theft. If the broker is not properly supervised by his firm, he can engage in this scheme for a long enough time period to abscond with the money, leaving their clients with nothing by the time they discover that the investment was fake.

AdobeStock_99700100-2-300x200Nickolas Godfrey was accused of operating a ponzi scheme through his company, Coast to Coast Business Funding, which he falsely represented was successful and generating revenue by providing short-term cash advances to businesses. He allegedly collected more than $1 million from 20 victims and attempted to solicit more funds. He was also purportedly involved in a tax evasion scheme from 2008 until 2015. He owned NJ Holdings, which he used in connection with Coast to Coast to operate his scheme, according to court documents. He also owned and operated Alter Ego Salon and Day Spa and Blis Day Spa and Salon in Charlotte. Court documents state that he “engaged in a scheme and artifice to defraud victims by making a series of false and fraudulent representations and deceptive half-truths of material facts, and concealing material information about his business, Coast to Coast.” He told his victims they would earn as much as 73.5 percent if they invested, and that would be used to fund the cash advances. Instead, he used victim money to pay personal expenditures and to make payments on his other businesses. He also “created bogus financial statements” in December 2012. He is also accused of failing to pay the IRS a substantial amount of employment taxes from Blis and Alter Ego employees. He is subject to forfeiture in the amount of at least $484,322.58, according to the indictment.

AdobeStock_77502568-1-300x199A former broker from Boise, Idaho, Rodney Allen, is wanted after being indicted on 10 counts of wire fraud on suspicion of heading a scam against at least 70 investors. Allen went missing after he learned of the investigation against him, accusing him of orchestrating and leading a ponzi scheme. Allen and his company, KA Investments Inc. were sued by the Idaho Department of Finance, alleging that he lied to investors, illegally diverted their funds, and was not licensed to sell securities. Beginning in 2009, the lawsuit claimed that Allen sent his investors “dummied-up account statements, showing ridiculous annual returns of up to 36 percent.” In April 2017, Allen had $7 million from investors, $2.9 million of which he took for his own personal use. On April 20th, Allen’s wife told a friend that he had taken his passport, cash and a gun from their safe in their home. His pickup was found abandoned April 22nd along the Snake River, by his home.

The Stoltmann Law Offices Commercial Litigation Group filed a Class Action Complaint in the Northern District of Indiana Federal Court seeking in excess of $5,000,000 in damages against First Baptist Church of Hammond who allegedly assisted in a Ponzi Scheme called Sure Line Investments operated by a Church Deacon Thomas Kimmel who was retained by the church to teach financial responsibility and provide secret kickbacks to Pastor Jack Schaap totally 1% of the stolen funds.

Kimmel, was sentenced in 2014 to 22 years in prison and ordered to pay more than $16.5 million in restitution after being convicted in federal court in Raleigh, North Carolina of defrauding hundreds of investors. Schapp is now serving a 12-year sentence for having sex with child who was also a church member.

The federal indictment against Kimmel characterized Sure Line Investments as a Ponzi scheme where investors were paid their interest from new investor money.

AdobeStock_78306447-1-300x199A Memphis, Tennessee family was recently convicted of stealing $21 million from 360 victims in a gold and silver ponzi scheme that lasted 10 years. Larry and his wife Kinsey Bates, along with Larry’s two sons, Chuck and Robert Bates, were found guilty on charges of mail and wire fraud and conspiracy. The U.S. Attorney’s Office announced the conviction on Wednesday. Over 360 victims allegedly lost more than $21 million dollars because the family ran a ponzi scheme by buying and selling gold and silver coins. They promoted their scheme through Christian television and radio programs, including the Jim Baker Show and the Jewish Voice. Larry Bates also held conferences across the United States predicting an economic collapse and promoting investments in precious metals.
Allegedly, between 2007 and 2013, investors gave more than $87 million to First American Monetary Consultants in order to buy precious metals. The Bates family used those funds in order to make personal purchases, and used $4 million of the funds to create International Radio Network, a Christian-themed radio network. They also used the money to build a huge home in Middleton, Tennessee. Larry Bates was convicted on 46 counts of mail and wire fraud. Chuck Bates was convicted of 18 counts. Robert Bates was convicted on five counts of mail fraud, three counts of wire fraud and one count of conspiracy. Kinsey Bates was convicted on one count of conspiracy and two counts of wire fraud.
If you or someone you know was a victim of the Bates’ ponzi scheme, you may be able to recover those losses. Pleas call 312-332-4200 today to speak to an attorney to find out how. The call is free with no obligation. Your funds may be recoverable on a contingency fee basis in the arbitration forum.

James VanBlaricum, a Texas-based proprietor of Signal Oil and Gas Co., an oil and gas exploration company, was arrested by federal authorities on charges of mail fraud. He is accused of convincing investors to put $2.6 million into an oil and gas investment program that was actually a ponzi scheme. VanBlaricum allegedly offered an investment program called the Land Lease Program for purchase to investors, not issuing investment payouts and then using that investment money for other purposes. 53 investors mailed personal or cashier’s checks to Signal, or wired checks to the company, making a total of $2.63 million from January 2006 through January 2009, according to the criminal complaint. VanBlaricum lured investors by promising an “assured” rate of return on the initial investment, ranging from nine to 15 percent of the amount invested, and the investors were told they would receive a full refund of their upfront investment after three to five years. Instead of doing so, VanBlaricum took $2 million of investor funds and dumped that into bank accounts to be used in other ways, such as day trading and employee payroll payouts. In 2008, he and other co-conspirators used Texas Energy Management and Texas Energy Mutual, two other companies, to continue the fraudulent scheme.

Diane Kaylor, a former broker and bookkeeper for Agape World was sentenced to 6 and a half years in prison for her role in a ponzi scheme. The scheme operated from October 2005 until January 2009 and led to 3,800 investors losing $150 million. Kaylor was found guilty on charges of wire fraud, mail fraud, conspiracy and securities fraud. She and Jason Keryc, another broker, were found guilty on the charges. Keryc was sentenced to nine years in prison in February. Keryc spent some of the investor money he earned from the scheme on a million dollar vacation home in Montauk, a Long Beach condo, jewelry, designer clothing and cars. Seven other individuals were also charged for their role in the scheme.

Todd Dyer, a Lake Geneva, Illinois man, who previously served time for a ponzi scheme, has been accused again of scamming individuals. An Illinois family claims that Dyer stole $1 million from them. The family was told that their insurance company had stolen their life insurance policy and Dyer promised to get them their money back in exchange for a fee. In 1999, he was convicted of running a $2.2 million ponzi scheme and spent 70 months in prison for it. He was then indicted for an alleged scheme beginning in March of 2008. Dyer told investors that their money would be used to purchase farm property or interests on farm property. In reality, that was not the case. In October 2012, he was accused of taking $250,000 from an individual who was interested in building a manufacturing facility and using the money for personal purposes.

Stoltmann Law Offices is investigating Troy Stratos, financial advisor to celebrities and self-described and promoted entertainment entrepreneur. His company, Next Level Media, never made any money, although Stratos reported that it did over a 15 year period. Nicole Murphy, ex-wife of comedian Eddie Murphy, sued him for fraud in federal court, claiming he bilked her out of $11 million after she hired him as her financial advisor. He faces another civil judgment for $2.1 million, after a real estate broker and his friends invested $1.9 million to produce a CD. Stratos used his company to run a ponzi scheme, bilking investors out of millions of dollars, telling investors that he knew Middle Eastern princes who were interested in producing movies with him. He also claimed he knew Carlos Slim, one of the world’s richest men, and that he was buying stock in Facebook for him. Because of this, he told investors the stock could be sold at favorable prices. He sent three wire transfers for $11.25 million to buy the shares.

If you lost money with Troy Stratos, you may be able to recover it by calling Stoltmann Law Offices at 312-332-4200 and speaking to an attorney. We represent investors nationwide in securities matters. The call is free wit no obligation.

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