Articles Tagged with ponzi scheme attorney

shutterstock_94632238-300x214The law offices of Gana Weinstein LLP are investigating investor recovery options due 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 revealing 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.

The SEC’s complaint alleges that Adams misled investors by telling them that their money would be used to secure harvest timber rights from land owners in several states.  The SEC alleged that Adams promised investors annual returns of 12-15%.  However, Madison Timber is accused of never having obtained any harvesting rights at all. Instead, Adams allegedly forged deeds and other documents to purportedly reflect the value of the timber on the land.  The SEC also alleged that Adams paid early investors with later investors’ funds and convinced other investors to roll over their investments and remain invested in the scheme.  Adams is also accused of using investors’ money for his own personal expenses and to develop an unrelated real estate project.

In a parallel action, the U.S. Attorney’s Office for the Southern District of Mississippi announced criminal charges against Adams.   Also in May 2018 Adams plead guilty to charges of wire fraud involving the Ponzi scheme which ensnared investors at least 14 states.

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shutterstock_183525509-300x200According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Hector May (May), formerly associated with Securities America, Inc. (Securities America) in New York, New York is under criminal investigation by the U.S. Department of Justice (DOJ) for investment fraud.  At the same time, May was terminated by Securities America on concerns that the advisor misappropriated client assets.

Investors who have come forward concerning May’s fraud claim that he sold what now appear to be fake tax-free corporate bonds.  It is doubtful that these investments ever existed.  Instead, the allegations claim that May most likely pocketed client funds and paid other clients funds with the proceeds from other investors – a classic Ponzi-scheme.  As with all Ponzi schemes this one collapsed when May could not make promised payments.

It appears that May conducted his alleged scheme through a disclosed outside business activity called Executive Compensation Planners, Inc.  May may have used this company to handle client investments and distribute fake returns to investors.  Outside business activities such as Executive Compensation Planners should have caused concern at May’s brokerage firm because these separate corporate entities are frequently used by unscrupulous advisors to conceal and commit frauds.  According to news sources, Executive Compensation Planners’ website in 2016 stated the firm was registered to sell securities and insurance but has since been taken down.  Further, May disclosed to clients in a brochure from Executive Compensation Planners that the firm handled more than $18 million in assets.

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shutterstock_173088497-300x199The law offices of Gana Weinstein LLP are investigating 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.  This is not Renison’s first securities offense.  In 2014, the Securities and Exchange Commission (SEC) issued an order permanently barring Renison from the securities industry.  The SEC’s order was the result of Renison’s role in a 2008 scheme to defraud one of his former advisory clients through the sale of a promissory note.  A year after the SEC issued its permanent bar, Renison established ARO Equity which is a self-described “private investment fund” claiming to invest in various business ventures throughout Massachusetts and New England.

The state of Massachusetts has 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.

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