Securities Lawyer Blog | Victim of Fraud?

TAG | recover losses from ponzi schemes

Jun/12

22

Orlando Ponzi Scheme Based on “Astrology”

Comments off · Posted by Securities Lawyer in FINRA

Soreide Law Group, PLLC, has begun investigating potential claims against Money Concepts Capital Corp. and broker, Gurudeo “Buddy” Persaud.

The Securities and Exchange Commission charged a former broker in Orlando, Fla., who defrauded investors in an astrology-based Ponzi scheme. The SEC alleges that Gurudeo “Buddy” Persaud lured family, friends, and others into investing in his firm, White Elephant Trading Company LLC, by falsely guaranteeing their money would be safe and yield high returns ranging from 6 to 18 percent. Persaud told investors he would invest in the debt, stock, futures, and real estate markets, but did not reveal that his trading strategy was based on his belief that markets are affected by gravitational forces. Allegedly, Persaud believed that the gravitational forces affect human behavior, and in turn, the stock market.

According to the SEC’s complaint filed in U.S. District Court for the Middle District of Florida, Persaud used investors’ money to make payments to other investors, commonly known as a Ponzi scheme. Persaud also lost $400,000 of investor funds through his trading, and diverted at least $415,000 to pay for his personal expenses, the SEC alleged. Persaud started using some of that money for his personal expenses allegedly from the beginning. Persaud created phony account statements, hiding his trading losses and giving investors a false sense of security.

Persaud was registered with Money Concepts Capital Corp., from November, 2003, through September, 2010. The alleged Ponzi scheme took place during this time.  Money Concepts was obligated to properly supervise Persaud during the time he was registered with the brokerage. Money Concepts Capital Corp. could possibly be liable for failing to supervise Persaud’s activities while registered with the firm.

If you or a loved one were clients of Gurudeo “Buddy” Persaud, White Elephant Trading Company and/or Money Concepts Capital Corporation, call Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, 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

22

Thomas Hammond, Fair Oaks, CA, Barred by FINRA

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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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May/12

25

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

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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

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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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Apr/12

24

FINRA FINES AXA $100,000 FOR NOT REMOVING PONZI BROKER SOONER

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In a March, 2012, article for Forbes, Bill Singer writes that for the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority (“FINRA”), without admitting or denying the findings, prior to a regulatory hearing and without an adjudication of any issue, AXA Advisors, LLC submitted a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. In the Matter of AXA Advisors, LLC, Respondent (AWC 2009020149901, March 13, 2012).

The Respondent AXA Advisors, LLC employs about 5,800 registered persons at 1,300 branch offices; and the firm is a subsidiary of AXA Financial, Inc. (a member of AXA Group). Respondent AXA conducts a general securities business, primarily engaged in the distribution of mutual funds, variable life insurance and variable annuity contracts. According to the AWC, Respondent AXA has no prior relevant disciplinary history.

Singer writes that the former Registered Representative Kenneth Neely was first registered in the securities industry in 1987 and affiliated with several FINRA member firms. By 2001, he was registered with UBS PaineWebber, Inc. and thereafter with Stifel, Nicolaus & Co., Inc.. Beginning in August 2007, Neely was employed at Respondent AXA’s Clayton, MO branch office. According to FINRA’s allegations, when Neely became associated with Respondent AXA in August 2007, he had been the subject of four customer complaints, including three arbitrations, concerning his business practices at prior employers. Additionally, Respondent AXA was aware that he was experiencing financial difficulties. The AWC alleges that in 2001, while employed at UBS, Neely began a Ponzi scheme, which he continued during his employ with Stifel and thereafter at Respondent AXA, where he induced that firm’s customers and others to participate in a fictitious “St. Louis Investment Club” and to invest in an equally fictitious real estate investment trust, the “St. Charles REIT.” Following his July 2009 termination by Respondent AXA for admittedly commingling and converting funds, FINRA entered into an AWC with Neely (AWC/20080157230901 /July 23,2009) whereby he was barred from the industry.

The Forbes article goes on to say that in April of 2008, during an annual audit of Neely, Respondent AXA reviewed Neely’s computer and discovered an Excel spreadsheet, which reflected a payment schedule for eight individuals. The AWC characterizes those individuals as having been induced by Neely to participate in his fraudulent scheme. This spreadsheet was titled “Statement of Accounts with Clients,” marked “Ken Neely,” listed Neely’s home address, and showed a total amount invested of $323,000. Additionally, the spreadsheet set out the initial amount each listed individual had invested and the amounts due in April 2008.

Silver writes that one of Respondent AXA’s examiners became suspicious about the spreadsheet and asked Neely to explain it. According to the AWC, in person and later in an email, Neely explained that a friend and potential client planned to start a business and needed advice on how to manage business finances. In response to that need, Neely claimed that he had used the spreadsheet to show his friend how to keep track of assets and liabilities. Then, in an email describing the spreadsheet, the AWC alleges that Neely falsely explained that he used his name instead of his friend’s company name, and names of individuals, instead of various vendors of his friend’s company. Why such substitutions? According to the AWC, Neely claimed he took these steps to ensure that he “would not be liable for any plans that [his friend] put together on his own or any mistakes he made while inputting his information.” Apparently for good measure, Neely added that his friend provided the individual names – which likely raised quite a few eyebrows given that one of the provided names was a client of Neely’s at Respondent AXA’s. The AWC states that “[d]espite these statements, the Firm accepted Neely’s explanation without adequate further review.

It was reported that FINRA concluded Respondent AXA’s response to the red flags raised by Neely’s spreadsheet, his explanations, and his background constituted a failure to reasonably supervise him and a further failure to investigate adequately the various indications concerning his misconduct, in violation of NASD Rules 2010 and 2110. Accordingly, FINRA imposed upon Respondent AXA the sanctions of a Censure and $100,000 fine.

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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Oct/11

26

Ex-Brokers from Edward Jones Under FBI Investigation Over Alleged Ponzi Scheme

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The FBI is investigating two former Edward Jones brokers based in South Dakota for their role in a “selling-away” case that involved raising money from clients who invested in an alleged Ponzi scheme writes Bruce Kelly in a September 28, 2011, article in InvestmentNews.com.

Kelly writes that according to Jones, a client brought the matter of Gibraltar Partners Inc. to the firm’s attention in March. As a result of its investigation, during which the company learned that the Justice Department was in the middle of a criminal investigation of Gibraltar Partners, Edward Jones fired the brokers, Jones spokesman John Boul wrote in an e-mail.

“A small number of Edward Jones clients have invested money in this scheme, away from the firm,” Mr. Boul wrote. “The firm is currently negotiating settlements with these clients.”

Edward Jones is one of the largest brokerage firms in the country. It has more than 12,000 brokers, most of them operating from one- or two-man offices. “Selling away” is one of the most common difficulties independent and franchisee broker-dealers face in their oversight of registered reps. Such reps typically operate in one- or two-man offices and have no branch manager looking over their shoulders on a day-to-day basis. Cases typically involve a broker selling a financial product that the broker-dealer did not approve or know about, with the investment vehicle blowing up and harming the client’s portfolio.

The InvestmentNews.com artcle goes on to say that a group of investors in June sued Gibraltar Partners in U.S. District Court in the Southern District of New York, alleging that Gibraltar and others, including the Rahfco Funds LP, were running an alleged Ponzi scheme. Investors are seeking $100 million in damages in that suit. Jones was not named in that lawsuit. Gibraltar Partners could not be reached to comment.

The names of the former Jones brokers allegedly involved in the matter were not revealed by Jones.  “Other investors who are not clients of Edward Jones also invested in Gibraltar” and that the firm is cooperating with federal and state authorities.

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you feel you have become a victim of these brokers associated with Edward Jones or other brokerages, by investing in the alleged Ponzi Scheme, Gibralter Partners, Inc., call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com

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

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Oct/11

7

ATTENTION CLIENTS OF GARY LANE:

Comments off · Posted by Securities Lawyer in FINRA

 
Gary Harrison Lane has been accused of improprieties in his client’s accounts. These accusations relate to the sale of government debt and or notes. Our investigation revealed that Gary Lane may have been involved in the sale of what could ultimately prove to be a ponzi scheme.
 
If the investigation later proves that Gary Lane was in fact selling ficticious notes to customers, this could result in criminal charges being filed. Gary Lane has worked for Banc of America Investment Services in Reno, Nevada, from July 99 through October 2009 and for Merrill Lynch in Reno, Nevada, from October 2009 through March 2011, where he was ultimately terminated for the alleged improprieties.
 
Our private investigators are actively looking into the investments sold by Gary Lane. If you were a client of Gary Lane, Soreide Law Group in interested in speaking with you. Please contact attorney Lars Soreide directly at 888-760-6552 or visit us on the web at www.securitieslawyer.com
 

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