Articles Tagged with ponzi scheme attorney

shutterstock_185913422-300x200The securities attorneys of Gana Weinstein LLP are experienced in helping investors recover investment losses due to various investment fraud schemes including Ponzi schemes, investment value manipulation, and outright theft and conversion of funds.

Unfortunately, the vast majority of investment fraud victims do not receive any recovery for a variety of reasons.  First, many victims are embarrassed and feel a sense of guilt over having been deceived and prefer not to talk about the experience.  Second, many victims believe that investor recovery is conducted by regulators and if a regulator such as the Securities and Exchange Commission (SEC) or Financial Industry Regulatory Authority (FINRA) take action investors are entitled to those funds.  The truth is regulators rarely compensate victims for their losses and if they do the process can take years, in some cases around a decade, during which time investors may loss their legal rights to pursue additional avenues of recovery.

Often time the best, and in many instances the only avenue of recovery, is by hiring a private attorney to investigate and pursue your claim.  The SEC has stated on its website that “It is important to understand that not all harmed investors will be able to recover money. Investors who do recover money may receive substantially less than their losses.  In addition, even when harmed investors are able to recover money, the process for distributing the money to harmed investors may take a long time.”

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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_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.

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.

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.

The state of Massachusetts alleges that ARO Equity and its members made material misstatements or omissions of material fact to investors in the sale of its securities.  ARO Equity is alleged to have failed to inform note holders of Renison’s criminal and disciplinary history.  Further, it was alleged that ARO Equity assured investors that their money is generally safe or somehow guaranteed but have failed to truthfully inform investors of the fund’s past or present performance.  Critically, the complaint alleges 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.

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