Articles Posted in Ponzi Scheme

shutterstock_155271245-300x300According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Frank Zito (Zito), formerly associated with Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in Ridgeland, Mississippi and currently registered with Coker & Palmer was terminated concerning allegations that Zito engaged in conduct such as failure to adhere to firm standards regarding selling away and failure to fully disclose participation in an outside business activity.  A month earlier in May 2018 a customer filed a complaint against Zito alleging that the broker made unsuitable recommendations and sold unapproved products from 2013 through January 2018.  The complaint is currently pending and alleges $571,000 in damages.

At this time, the claims against Zito are unclear as to the exact nature and extent of the unapproved product sale activity.  Zito has outside business disclosures including timber purchasing from timber management firm.

It is possible that this activity is related to the alleged Ponzi Scheme orchestrated by Arthur Adams (Adams) and Madison Timber Properties LLC (Madison Timber) by The Securities and Exchange Commission (SEC).   The complaint against Adams and Madison Timber was unsealed on May 1, 2018 Mississippi federal court and revealed the SEC’s fraud charges against the Mississippi company and its principal who has been accused of stealing from at least 150 investors in a $85 million Ponzi scheme.  Adams and Madison Timber agreed to a permanent injunction, an asset freeze, and expedited discovery.

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shutterstock_189100745-300x199The law offices of Gana Weinstein LLP continue to investigate the Woodbridge Group of Companies and the Woodbridge Mortgage Funds (Woodbridge).  The Securities and Exchange Commission (SEC) has alleged that the Woodbridge operated a billion-dollar Ponzi scheme ensnaring about 8,400 investors. Woodbridge solicited hundreds of disreputable insurance agents and investment brokers to sell its false notes that the firm claimed to be backed by mortgages.  In plain sight to regulators, Woodbridge engaged in a nationwide investment fraud by offering the sale of unregistered securities.

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Donna Barnard (Barnard) appears to be an agent for Woodbridge fraudulent note sales.  Barnard was formerly associated with HD Vest Investment Services (HD Vest) out of the firm’s Kilgore, Texas office location.  Customers have filed at least 11 complaints alleging millions in losses resulting from the sale of Woodbridge promissory notes.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Barnard, in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including recommending fraudulent investments.

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shutterstock_160304408-300x199According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) former advisor John Maccoll (Maccoll), formerly associated with UBS Financial Services Inc. (UBS) in Birmingham, Michigan was barred by FINRA. In addition, The Securities and Exchange Commission (SEC) charged Maccoll with defrauding his brokerage customers out of nearly $4 million in an investment scam.

According to the SEC’s complaint, Maccoll used high pressure sales tactics to solicit at least 15 of his retail brokerage customers to invest in what he described as a highly-sought-after private fund investment. The SEC claims that most of the victims were elderly and retired and invested through their retirement accounts. The SEC claims that Maccoll told his customers that the purported fund investment would allow them to diversify their portfolios, receive annual investment returns as high as 20%, and give them investment growth potential that was better than the growth they received in their brokerage accounts.  The SEC alleges that these statements were false and that Maccoll did not invest the customers’ money but in fact stole it for his own personal use.  The SEC charged that $3.6 million was spent on his own personal expenses.  To conceal the scheme, the SEC alleged that Maccoll instructed his customers not to tell others about the purported fund investment, provided some of his customers with fake account statements reflecting fictitious returns, and paid over $400,000 in Ponzi-like payments to certain of the customers to keep the scheme alive.

In conjunction with the SEC’s action, the U.S. Attorney’s Office for the Eastern District of Michigan filed criminal charges against Maccoll.

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shutterstock_20354401-300x200The law offices of Gana Weinstein LLP continue to investigate the Massachusetts Securities Division’s enforcement action and administrative complaint against ARO Equity, LLC (ARO Equity), Thomas David Renison (Renison), and Timothy James Allcott (Allcott).  The complaint alleges that ARO Equity is Ponzi-scheme.

Upon information and belief former broker Barry Horowitz (Horowitz) recommended Renison and ARO Equity to his investment and legal clients.  Horowitz was employed by Lincoln Financial Securities Corporation (Lincoln Financial) until August 2018.  At the same time Horowitz worked as an attorney with Nirenstein, Horowitz & Associates, P.C.

In the ARO Equity fraud, the state of Massachusetts claimed that Allcott was the manager of ARO Equity and together with Renison took $5.8 million of investor funds since August 2015.  The complaint alleges that these funds were raised through the sale of unsecured promissory notes promising 8-12% annual returns over three to five-year terms.  The complaint alleges that investors made significant investments from their retirement accounts by transferring qualified retirement assets to a self-directed IRA to invest in ARO Equity.  Despite representations of safety, the complaint alleged that ARO Equity principals have received undisclosed and excessive commission payments and executive compensation for soliciting investments and bears the hallmarks of a Ponzi scheme.  In fact, the complaint claims that ARO Equity has only “invested” approximately half of the money received from investors and lost most of it.

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shutterstock_143685652-300x300The law offices of Gana Weinstein LLP continue to investigate the Woodbridge Group of Companies and the Woodbridge Mortgage Funds (Woodbridge).  The Securities and Exchange Commission (SEC) has alleged that the Woodbridge operated a billion-dollar Ponzi scheme ensnaring about 8,400 investors. Woodbridge solicited hundreds of disreputable insurance agents and investment brokers to sell its false notes that the firm claimed to be backed by mortgages.  In plain sight to regulators, Woodbridge engaged in a nationwide investment fraud by offering the sale of unregistered securities.

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) John Ernst (Ernst) appears to be an agent for Woodbridge fraudulent note sales.  Ernst was formerly associated with Foresters Equity Services, Inc. (Foresters Equity) out of the firm’s San Diego, California office location.  In November 2017 the State of Wisconsin opened an investigation into Ernst in connection with potential sales of Woodbridge promissory notes.  In addition, Foresters Equity terminated Ernst in February 2018 stating that he violated the firm’s policies and procedures by engaging in an undisclosed private securities transaction away from the broker dealer without approval.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Ernst, in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including recommending fraudulent investments.

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shutterstock_186772637-300x199The attorneys at Gana Weinstein LLP are looking into potential actions to help investors ensnared in the 1st Global Capital LLC (1st Global Capital) investment fraud scheme.  According to the Kansas City Star 160 victims of the 1st Global Capital resided in the Kansas City area.  It appears that many of the victims I the Kansas City area were brought to 1st Global by Matthew Walker – CEO of Overland Park-based Pinnacle Plus Financial (Pinnacle Plus) and other affiliated businesses.  Investors who invested through Walker and Pinnacle Plus have stated that they were told 1st Global Capital was essentially a sure thing and a secure investment.

Emails and other documents released by the SEC show Pinnacle Plus soliciting numerous investors and the involvement of other Pinnacle Plus staff and advisors including Kenny Riewerts.

As revealed in court documents and the complaint filed by The Securities and Exchange Commission’s (SEC) – 1st Global Capital engaged in a four year unregistered securities offering overseen by Carl Ruderman (Ruderman) – also charged.  The SEC has alleged that more than 3,400 investors nationwide have been caught in the company’s $287 million fraud.

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shutterstock_172399811-297x300The attorneys at Gana Weinstein LLP are looking into potential actions to help investors ensnared in the 1st Global Capital LLC (1st Global Capital) investment fraud scheme.  According documents filed by The Securities and Exchange Commission’s (SEC) it appears that some of the victims were brought to 1st Global by brokers who formerly worked for Taylor Capital Management (Taylor Capital).  These advisors include Trae Wieniewitz (Wieniewitz) – also a affiliated with Wieniewitz Wealth Management, LLC – and Brian Korienek (Korienek), also affiliated with Goldstone Financial Group, LLC.  It appears that these two brokers used their disclosed relationships with RIA firms to sell fraudulent 1st Global Capital investments to their clients.

As revealed in court documents and the complaint filed by SEC – 1st Global Capital engaged in a four year unregistered securities offering overseen by Carl Ruderman (Ruderman) – also charged.  The SEC has alleged that more than 3,400 investors nationwide have been caught in the company’s $287 million fraud.

As in many frauds, the SEC alleged that 1st Global Capital used substantial investor funds for purposes other than the cash advances including misappropriated at least $35 million of investor money from which at least $28 million went directly to Ruderman and other entities he owned or controlled.  Other alleged illegitimate uses include paying operating expenses and purchasing already-distressed, long-term credit card debt.  As a result, by October 2017 1st Global Capital experienced a shortage of investor funds of $23 million which increased to about $50 million by June 30, 2018.

After the writing was on the wall Ruderman resigned from 1st Global Capital in July after the company declared bankruptcy.

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shutterstock_186211292-300x200The attorneys at Gana Weinstein LLP are looking into potential actions to help investors ensnared in the 1st Global Capital LLC (1st Global Capital) investment fraud scheme.  As revealed in court documents and the complaint filed by The Securities and Exchange Commission’s (SEC) – 1st Global Capital engaged in a four year unregistered securities offering overseen by Carl Ruderman (Ruderman) – also charged.  The SEC has alleged that more than 3,400 investors nationwide have been caught in the company’s $287 million fraud.

The SEC alleged that 1st Global Capital deceived investors through its offerings of short-term financing to small and medium-sized businesses.  1st Global Capital used a network of barred brokers, registered and unregistered investment advisers, and other sales agents paying them millions in commissions to sell unregistered and fraudulent securities in no fewer than 25 states. The Company and their agents allegedly promised investors high-returns and a low-risk investment in which investor money is used to make short-term cash advances called Merchant Cash Advances (MCAs) to businesses that could not obtain more traditional financing.

As in many frauds, the SEC alleged that 1st Global Capital used substantial investor funds for purposes other than the cash advances including misappropriated at least $35 million of investor money from which at least $28 million went directly to Ruderman and other entities he owned or controlled.  Other alleged illegitimate uses include paying operating expenses and purchasing already-distressed, longterm credit card debt.  As a result, by October 2017 1st Global Capital experienced a shortage of investor funds of $23 million which increased to about $50 million by June 30, 2018.

After the writing was on the wall Ruderman resigned from 1st Global Capital in July after the company declared bankruptcy.

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shutterstock_186211292-300x200The law offices of Gana Weinstein LLP continue to investigate the Woodbridge Group of Companies and the Woodbridge Mortgage Funds (Woodbridge).  The Securities and Exchange Commission (SEC) has alleged that the Woodbridge operated a billion-dollar Ponzi scheme ensnaring about 8,400 investors. Woodbridge solicited hundreds of disreputable insurance agents and investment brokers to sell its false notes that the firm claimed to be backed by mortgages.  In plain sight to regulators, Woodbridge engaged in a nationwide investment fraud by offering the sale of unregistered securities.

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Joel Flaningan (Flaningan) appears to be an agent for Woodbridge fraudulent note sales.  Flaningan was formerly associated with NYLife Securities LLC (NYLife Securities) out of the firm’s Fort Wayne, Indiana office location.  In April 2018 a customer filed a complaint alleging $65,000 in damages resulting form the sale of Woodbridge promissory notes.  Thereafter, NYLife Securities terminated Flaningan in May 2018 stating that he violated the firm’s policies and procedures by engaging in an undisclosed private securities transaction away from the broker dealer without approval.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Flaningan, in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including recommending fraudulent investments.

shutterstock_155271245-300x300The law offices of Gana Weinstein LLP continue to investigate the Woodbridge Group of Companies and the Woodbridge Mortgage Funds (Woodbridge).  The Securities and Exchange Commission (SEC) has alleged that the Woodbridge operated a billion-dollar Ponzi scheme ensnaring about 8,400 investors. Woodbridge solicited hundreds of disreputable insurance agents and investment brokers to sell its false notes that the firm claimed to be backed by mortgages.  In plain sight to regulators, Woodbridge engaged in a nationwide investment fraud by offering the sale of unregistered securities.

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) Alan New (New) appears to be an agent for Woodbridge fraudulent note sales.  New was formerly associated with NYLife Securities LLC (NYLife Securities) out of the firm’s Fort Wayne, Indiana office location and is currently still registered with advisory firm Synery Investment Services LLC.  At least six customers have accused New of selling them the fraudulent Woodbridge investment.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like New, in order to detect and prevent brokers from offering investments in this fashion.  In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public.  Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including recommending fraudulent investments.