Securities Lawyer Blog | Victim of Fraud?

TAG | Ponzi scheme

Apr/13

24

Hedge Fund Promoters Defrauded Investors Says SEC

Comments off · Posted by Securities Lawyer in FINRA

A Minnesota attorney and two San Francisco-area hedge fund promoters defrauded investors of more than $21 million by concealing the financial collapse of the fund’s only borrower. The individuals raised more than $21 million from investors in the Capital Solutions Monthly Income Fund after the fund’s sole business partner, Hennessy Financial, defaulted in May 2008, the SEC claims.
As a result, the fund “had no meaningful income-producing investments as of May 2008,” the SEC claims. “Consequently, the Fund began mostly paying existing investors out of proceeds raised from new investors” — a typical Ponzi scheme — “because the Fund had very little income relative to its obligations.”
The SEC said the individuals, who launched the fund in 2004 and owned its distributor and investment adviser, falsely assured investors that the fund “was enjoying success and weathering disruptions in the credit and real estate markets.”
Between the fund’s launch in 2004 and August 2009, they allegedly raised about $74 million from 450 investors across the country.
Meanwhile, they also ran True North, a firm the SEC has accused of accounting fraud.
Besides the individuals involved, the following are the funds involved: True North Financial Corp., Hennessey Financial Monthly Income Fund, Capital Solutions Distributors, Capital Solutions Management and Transactional Finance Fund Management.
Many of the investors were sold this fund by NFP Securities, Inc. and their brokers. If you have experienced financial losses due to your stockbroker or financial advisor’s recommendations of these funds, call Soreide Law Group for a free consultation with an attorney at: 888-760-6552.

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Jan/13

7

Broker Jason T. Knapp Arrested in Alleged Ponzi Scheme

Comments off · Posted by Securities Lawyer in FINRA

Jason T. Knapp, Corinth, New York, was arrested in connection with a nationwide Ponzi scheme, which allegedly involves hundreds of thousands of dollars. Knapp was a registered representative of Dawson James Securities of Boca Raton, FL, and had raised investment capital with a company call SteepleChase Group, making claims that returns on investments would be over 18%. He was terminated in June, 2012, because he allegedly falsified internal documents and documents that were provided to customers.

Knapp is charged with second-degree larceny for allegedly stealing from a New York investor. There are also several victims from Boca Raton, FL.
There are currently investigations in Florida, Arizona, Rochester, New York City
and Maryland.

If you feel you may have a claim against former broker Jason Knapp call 888-760-6552.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. Visit our website at: http://www.securitieslawyer.com.

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Dec/12

19

Were You a Client of Gary Harrison Lane?

Comments off · Posted by Securities Lawyer in FINRA

Securities Attorney, Lars Soreide, of Soreide Law Group was recently quoted in an article from the Reno Gazette-Journal, written by Jaclyn O’Malley regarding former broker Gary Harrison Lane. The quote reads as follows:

“Florida securities attorney Lars Soreide said Tuesday he has represented a few clients who have recently settled with broker firms connected to Lane, that he accused of negligently superivising Lane’s activities and “selling away” investments. He said he could not give specifics because the civil cases were resolved under confidential agreements. Soreide said had the brokers properly supervised Lane, they would have uncovered the fraud.”

Soreide Law Group first brought attention to Gary Lane in the website blog entitled, “ATTENTION CLIENTS OF GARY LANE,” dated October 7, 2011. Since then, Lane was indited on federal charges. The above article from the website blog listing the award for Mr. Soreide’s clients, was dated September 5, 2011.

Gary Harrison Lane had worked for Banc of America Investment Services in Reno, Nevada, from July 1999 through October 2009 and for Merrill Lynch in Reno, Nevada, from October 2009 through March 2011, where he was terminated for the alleged improprieties. Lane allegedly targeted inexperienced investors, and the elderly. He is accused of a Ponzi scheme which had bilked his clients over $2 million.

Securities Attorney, Lars Soreide, successfully settled the claims in favor of his clients though a FINRA arbitration.

If you or a loved one experienced financial losses because of Gary Harrison Lane, call Soreide Law Group, and speak to an attorney regarding potential recovery of YOUR losses. Please call 888-760-6552 or visit us on the web at http://www.securitieslawyer.com.

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Dec/12

13

$42 Million Ponzi-Like Scheme Shut Down by SEC

Comments off · Posted by Securities Lawyer in FINRA

The Securities and Exchange Commission (SEC) announced that it obtained an emergency court order to halt an alleged Ponzi-like scheme operated by Small Business Capital Corp. and its principal Mark Feathers, who raised $42 million by selling securities issued by Investors Prime Fund LLC and SBC Portfolio Fund LLC – two mortgage investment funds they controlled.

The SEC alleges that over 400 investors were promised that profits from mortgage investments would yield annual returns of 7.5 percent or more. When in fact, Feathers operated a Ponzi-like scheme by paying returns to investors that came partly from fund profits and partly from other investors.

“Feathers raised millions from investors by promising high returns,” said John McCoy, Associate Regional Director of the SEC’s Los Angeles Office. “The returns turned out to be too good to be true and were funded in part with new investors’ money.”

In the SEC article they allege that from 2009 to early 2012, Feathers improperly transferred more than $6 million from the funds to Small Business Capital to pay its expenses, including substantial payments to Feathers.

Additionally, the SEC alleges that investors were not told that in February and March 2012, the defendants caused one fund to sell mortgages to the other fund at an inflated price, thus generating a “profit” for the selling fund so it could pay Small Business Capital management fees of more than $575,000. The SEC charged Feathers and Small Business Capital for Small Business Capital’s effecting transactions in the funds’ securities without being registered as a broker-dealer with the SEC.

If your broker recommended you invest in this product, call and speak to an attorney at Soreide Law Group for a free consultation on how to potentially recover your investment losses. Call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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Sep/12

5

Article Quotes Securities Attorney Lars Soreide

Comments off · Posted by Securities Lawyer in FINRA

The following is an article from the Reno Gazette-Journal, from Sept. 4th., 2012, written by Jaclyn O’Malley:

Former Reno financial advisor indicted by feds related to ponzi scheme
Sep 04

A former Reno financial advisor has been indicted on federal charges related to duping elderly and inexperienced investors of at least $2 million with a long-running ponzi scheme involving U.S. treasury bonds.

Gary Harrison Lane, 59, was booked Friday into the Washoe County Jail on a warrant charging him with the Reno federal grand jury’s Aug. 8 indictment, and a warrant on a 2011 Reno police charge related to bounced checks.

It was not known Tuesday if Lane had obtained an attorney. No court date had been set. He remained in custody Tuesday.

The indictment charges Lane with 12 counts of mail fraud related to a dozen investors who gave him nearly $2.1 million, combined, between March 2010 and March 2011. It alleges that Lane deposited their money into E-trade accounts not affiliated with his employer, while the investors believed he was purchasing U.S. Treasury Bonds on their behalfs.

Lane is also charged in the indictment with five counts of tax evasion related to allegedly filing income tax returns between 2007 and 2010 where he listed his taxable income as an amount lower than what he earned.

The court document said Lane’s alleged fraud began at least in May 2002, and continued until March 7, 2011. It added he had targeted investors who were elderly, or who had no investment experience. The indictment did not list the hometowns of the victims, or what led to the criminal investigation.

Lane had worked in Reno as a financial advisor for Bank of America Investment Services, which later merged with Merrill Lynch, until March 2011, the indictment said. During his tenure with the business, Lane developed a scheme to defraud investors through an E-trade account instead of following appropriate company proceedures, the indictment said.

Clients, the indictment said, were told their money would be invested in U.S. Treasury Bonds which would pay more than 6 percent interest, and would mature within two years. After Lane obtained the clients’ money, he allegedly created false confirmations that he would send the investors by mail. Lane allegedly gave the investors’ money to his wife, who then put the funds into her own E-trade account. The money was then allegedly withdrawn for personal use, or as how Lane would pay other investors through the ponzi scheme, by claiming the money was the interest gained from the bonds.

The indictment said Lane never purchased any U.S. treasury bonds on behalf of the investors, and there has never been a time during the period of the alleged fraud where return rates on the government bonds were 6 percent after a maturity period of two years or less.

Internet professional networking sites list Lane as a Reno-based financial broker with 30 years industry experience. His last address is listed as an apartment in Reno.

Florida securities attorney Lars Soreide said Tuesday he has represented a few clients who have recently settled with broker firms connected to Lane, that he accused of negligently superivising Lane’s activities and “selling away” investments. He said he could not give specifics because the civil cases were resolved under confidential agreements. Soreide said had the brokers properly supervised Lane, they would have uncovered the fraud.

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Jul/12

12

New York Rep Barred by FINRA

Comments off · Posted by Securities Lawyer in FINRA

Thomas Edward Kelly (CRD #1386403, Registered Principal, Johnson City, New York)

was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Kelly consented to the described sanction and to the entry of findings that he engaged in a scheme to defraud investors, including firm customers, of funds totaling approximately $1 million.

FINRA reported that Kelly’s scheme involved persuading potential investors to invest in an entity, which was not a firm-approved entity. Kelly did not inform investors that he was the principal owner of the entity, nor did he inform his firm of his activities with the entity or that he was recommending that customers invest in it. Kelly falsely represented to the investors that they were purchasing safe and stable investments, including “FDIC insured” CDs and savings accounts.

These FINRA findings also stated that to conceal his fraud, Kelly provided investors with fictitious account statements and tax Forms-1099, which falsely purported to reflect a return on their investments. Through these misrepresentations, Kelly converted approximately $1 million from the investors for his own use, including repaying earlier investors, investing in the stock market and paying personal expenses.

The findings also included that the firm reimbursed these customers for their stated account values, which equaled approximately $1 million. Kelly did not contribute to the payments.

A criminal complaint was filed against Kelly in the United States District Court for the Northern District of New York in connection with this conduct.

(FINRA Case #2010025344701)

 

This information was found on FINRA’s website under “Disciplinary and Other FINRA Actions, June, 2012.

 

 Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. Call for a free consultation on how to potentially recover your financial losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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Jun/12

22

Thomas Hammond, Fair Oaks, CA, Barred by FINRA

Comments off · Posted by Securities Lawyer in FINRA

 

Thomas Brown Hammond (CRD #2389080, Registered Representative, Fair Oaks, California)

was barred from association with any FINRA member in any capacity.  Hammond consented to the described sanction and to the entry of findings that he solicited both his brokerage firm customers and customers of his consulting business to invest funds in a fictitious private portfolio that would earn a steady interest rate in excess of their current investments, then converted those funds for his own use.

Hammond stole at least $546,650 from customers at his member firm and his consulting business. At least $492,250 was taken from Hammond’s customers at his firm.

FINRA’s findings stated that when his customers inquired about their investments, Hammond sometimes provided bogus updates of their investments, either orally or through false one-page account summaries.

One customer wanted to cash out $58,000 in the private portfolio, so Hammond told the customer it would take seven days for the money to be available. Hammond returned $48,000 to that client the next week. The money was fraudulently obtained from another customer.

(FINRA Case #2011026683401 )

This information was on FINRA’s website under “Disciplinary and Other FINRA Actions, June, 2012.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented numerous clients nationwide. Call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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Jun/12

13

SEC Charges 14 in NY-Based Ponzi Scheme

Comments off · Posted by Securities Lawyer in FINRA

Yesterday, June 12, 2012,  The Securities and Exchange Commission (SEC) charged 14 sales agents who misled investors and illegally sold securities for a Long Island-based investment firm at the center of a reported $415 million Ponzi scheme. 

The SEC alleges that the agents promised falsely that investor returns would be as high as 12 to 14 percent in several weeks when they sold investments offered by Agape World Inc. The Agape securities they sold did not exist, and investors were lured into a Ponzi scheme. The agents allegedly received $52 million in commissions and payments out of investors funds. None of these sales agents were even registered with the SEC to sell securities, nor were they registered with a registered broker or dealer. Agape also was not registered with the SEC.

Over 5,000 investors nationwide were impacted by this scheme that lasted from 2005 to January 2009, when Agape’s president and organizer of the scheme Nicholas J. Cosmo was arrested. He was sentenced to 300 months in prison and ordered to pay more than $179 million in restitution.

On the SEC’s website the following names of the agents involved were listed:

  • Brothers Bryan Arias and Hugo A. Arias of Maspeth, N.Y
  • Brothers Anthony C. Ciccone of Locust Valley, N.Y. and Salvatore Ciccone of Maspeth, N.Y.
  • Brothers Jason A. Keryc of Wantagh, N.Y. and Michael D. Keryc of Baldwin, N.Y.
  • Siblings Martin C. Hartmann III of Massapequa, N.Y. and Laura Ann Tordy of Wantagh, N.Y.
  • Christopher E. Curran of Amityville, N.Y
  • Ryan K. Dunaske of Ronkonkoma, N.Y.
  • Michael P. Dunne of Massapequa, N.Y
  • Diane Kaylor of Bethpage, N.Y
  • Anthony Massaro of Boynton Beach, Fla
  • Ronald R. Roaldsen, Jr. of Wantagh, N.Y.

SEC’s complaint charges Bryan and Hugo Arias, Anthony and Salvatore Ciccone, Jason and Michael Keryc, Dunne, Hartmann, Kaylor, Massaro, and Tordy with alleged violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint charges all 14 defendants with violations of Section 15(a) of the Exchange Act, and Sections 5(a) and 5(c) of the Securities Act.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a loved one experienced a loss through any of the above listed sales agents working for Agape World Inc.,  for a free consultation with an attorney on how to potentially recover your losses, please call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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May/12

25

Ponzi Scheme May Have Targeted Ft. Lauderdale’s Gay Community, Wilton Manors

Comments off · Posted by Securities Lawyer in FINRA

In a May 24th, 2012, article from Ft. Lauderdale’s Sun-Sentinel, Jon Burstein writes that an investment adviser from Ft. Lauderdale, and others, exploited trust and friendships within the Ft. Lauderdale gay community of Wilton Manors to help fuel a multimillion-dollar investment fraud, according a lawsuit brought this week by a group of investors.

There were fourteen residents of Broward County who alleged fell prey to accused Ponzi schemer George Elia. A well-known figure in Wilton Manors, Jim Ellis, and his daughter, Janet Ellis, vouched for Elia’s success as a day trader. These investors lost about $2.5 million to Elia, who is now in federal lockup facing a wire fraud charge.

According to the Sun-Sentinel article, the investors filed suit in Broward Circuit Court against Elia, Elia’s wife, the Ellises and Elia’s business, International Consultants & Investment Group Limited Corp. They are the second group of investors to sue Elia. A California family filed a $4 million lawsuit against Elia in October that led to a judge freezing his businesses’ bank accounts.

Burstein writes that Elia fled to the Mediterranean island of Cyprus, where he was born, in January and appeared to be out of the reach of U.S. authorities. But in March, he flew back to Las Vegas to find U.S. marshals waiting for him at the airport.  The SEC has also filed a civil lawsuit against him accusing him of raising more than $11 million using lies and bogus financial statements.

The Sun-Sentinel article adds that this latest lawsuit alleges the Ellises provided Elia with access to the Wilton Manors community: Jim Ellis was active in the nightlife scene and Janet Ellis worked as the property manager of Wilton Station condo development.
“Each of the plaintiffs was courted by Jim and Janet and regaled with false stories/demonstrations of a lavish lifestyle made possible by Jim and Janet’s supposed investments with Elia,” according to the lawsuit filed Tuesday.

Ellis said in a February interview that he was a victim of Elia like all the other investors.

According to the court records, Elia funneled at least $2.3 million from International Consultants bank accounts into companies controlled by him and his wife, Darlene, and withdrew at least $242,000 in cash in 2010 and 2011.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

 

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May/12

7

Blimline sentenced in Oil and Gas Ponzi Scheme

Comments off · Posted by Securities Lawyer in FINRA

It was announced today that a federal judge sentenced a 36-year-old Dallas man, Joseph Blimline, in connection with his role in a pair of complex, lucrative oil and gas Ponzi schemes that operated in Michigan and Texas, U.S. Attorney for the Eastern District of Texas John M. Bales announced.

Joseph Blimline was sentenced to 240 months in federal prison on each of the charges related to the Ponzi schemes on May 3, 2012, before U.S. District Judge Marcia A. Crone,who ordered the sentences to run concurrently and that restitution be made to the victims of the schemes.

At the sentencing hearing, the government presented testimony and evidence which established that Blimline and others began operating a Ponzi scheme in Michigan between November 2003 and December 2005. Blimline ordered that later investor payments be used to pay previous investors and diverted investor payments for his own personal benefit–thus creating a ‘Ponzi Scheme.’ The Michigan scheme netted over $28 million before its collapse.

According to the FBI website article, Blimline exported the Michigan Ponzi scheme to Texas, in 2006, where he and his new co-conspirators began the operation of Provident Royalties in Dallas. Blimline made  false representations and failed to disclose material facts to their investors in order to persuade the investors into providing payments to Provident. Blimline received millions of dollars in unsecured loans from investor funds and also directed the purchase by Provident of worthless assets from his Michigan enterprise. In the Provident scheme, funds from later investors were also consistently used to make payments to early investors, resulting in the collapse of the scheme in 2009. The Provident scheme netted over $400 million from approximately 7,700 investor victims.

“The Michigan agents worked hand in hand with the agents in Texas and with federal and state securities regulators to untangle both of these complicated Ponzi schemes and bring the perpetrators to justice for their abuse of the trust of others to obtain criminal profits,” said U.S. Attorney Bales. “To all potential investors, I urge you to be wary of investment vehicles that promise exorbitant rates of return. Remember: If the opportunity appears too good to be true, then it probably is.”

U.S. Attorney for the Western District of Michigan Donald A. Davis praised the diligent work and cooperation of all involved and said, “Stealing money through fraud and deceit will not be tolerated.”

FBI Detroit Division Special Agent in Charge Andrew G. Arena said, “This sentencing comes as a result of the hard work performed by agents committed to stopping this type of fraud. Those who choose to steal money through the operation of these schemes will be arrested and brought to justice.”

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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