Recent Posts

Salvaging Returns For Investors From Ponzi Schemes
Posted on 28 Jun 2012 by Thomas O. Gorman

The goal of enforcement officials is always to arrive at the earliest time to save investor funds from the fraudsters. Despite their best efforts, frequently they arrive after much of the money is gone. Yet often portions can be saved. This is illustrated... Read More

ZeekRewards Victims: What Happens Next
Posted on 24 Aug 2012 by Jordan D. Maglich

"It's a process...We're going to try to gather as much money as we can and figure out who deserves what." Kenneth Bell, Court-appointed Receiver of ZeekRewards The Securities and Exchange Commission ("SEC")'s shutdown... Read More

Madoff Anniversary: Scam Takes Additional Toll
Posted on 15 Dec 2010 by Mark Zimbelman

Saturday, December 11, 2010 was the two-year anniversary of the day when Bernie Madoff's sons, Mark and Andrew, contacted law enforcement officials to notify them that their father was running the largest Ponzi scheme in history. On this same day... Read More

Soccer Gold Medalist, NFL Players Sue Bank and Investment Advisor For Ponzi Scheme Investment
Posted on 17 Aug 2012 by Jordan D. Maglich

Several prominent athletes, including a newly-minted gold medalist member of the U.S. Olympic Soccer Team, have sued their former financial advisor and his employer, SunTrust Bank ("SunTrust"), alleging that they were unwitting investors in... Read More

Utah Man Pleads Guilty To Running Two Separate Ponzi Schemes
Posted on 23 Apr 2013 by Jordan D. Maglich

A Utah man agreed to plead guilty for his involvement in two separate Ponzi schemes - while on parole for a previous conviction for a third Ponzi scheme - that took in more than $30 million from investors. Wayne Ogden, of Koosharem, Utah, was convicted... Read More

SEC Efforts to Compel SIPC Coverage For Stanford Victims Rejected
Posted on 22 Jul 2014 by Thomas O. Gorman

The D.C. Circuit rejected efforts by the SEC to compel the Securities Investor Protection Corporation to liquidate a broker-dealer that was part of the Stanford Ponzi scheme empire. The investors had purchased CDs from an off-shore Stanford entity. The... Read More

SEC: Utah Man Operated $100 Million Ponzi Scheme
Posted on 29 Jun 2012 by Jordan D. Maglich

A Utah man who conducted real estate seminars across the country was the target of an emergency proceeding initiated by the Securities and Exchange Commission that charged him with operating a $100 million Ponzi scheme with hundreds of investors. Wayne... Read More

Judge Rejects "Too Sick For Prison" Defense, Sentences Ponzi Schemer to 41 Months
Posted on 13 Dec 2012 by Jordan D. Maglich

A Connecticut man who scammed victims out of more than $500,000 in a classic Ponzi scheme is not too sick to serve time for his crimes, despite pleading from his attorneys that a sentence of home confinement was more appropriate. United States District... Read More

$157 Million Ponzi Scheme Uncovered in China?
Posted on 7 Jun 2012 by Jordan D. Maglich

Several news outlets are reporting that a Chinese shopping website may have been outed last week as a Ponzi scheme, with the number of victims estimated in the hundreds of thousands and rumors that the founder had skipped town along with senior executives... Read More

California Man Charged With $49 Million Ponzi Scheme
Posted on 6 Nov 2012 by Jordan D. Maglich

Federal authorities arrested a California man of Pakistani descent on charges that he masterminded an investment scheme that raised nearly $50 million from investors. Syed Qaisar Madad, 65, a Pakistani native with Canadian citizenship living in the US... Read More

Grand Juror Indicted After Tipping Off Ponzi Schemer
Posted on 21 Aug 2013 by Jordan D. Maglich

A federal grand juror is facing criminal charges after he allegedly disclosed details regarding the investigation and indictment of a suspected Ponzi schemer to a witness during a chance encounter at a local Costco - which resulted in the witness tipping... Read More

Supreme Court to Decide Whether to Hear Dispute Over Calculation of Madoff Victim Losses
Posted on 25 Jun 2012 by Jordan D. Maglich

The United States Supreme Court will meet last week to decide whether to hear the dispute over the calculation of victim losses stemming from Bernard Madoff's $65 billion Ponzi scheme. The court-appointed trustee, Irving Picard, has notched several... Read More

SEC Files Offering Fraud and Ponzi Scheme Cases
Posted on 15 Apr 2015 by Doug Esten

A staple of SEC enforcement in recent years has been offering fraud and Ponzi scheme cases. This week the Commission filed two more of these actions, one an offering fraud targeting military personnel and a second and investment fund fraud case which... Read More

After Two Days of Trial, Florida Man Agrees to Plead Guilty to $10 Million Ponzi Scheme
Posted on 14 Mar 2013 by Jordan D. Maglich

In an unlikely turn of events, a Florida man decided to change his plea from 'not guilty' to 'guilty' on the third day of his trial, effectively ending the trial. George Elia, 69, made his decision after hearing a morning of testimony... Read More

Admitted Ponzi Schemer Claims Innocence, Says Attorney Coerced Him To Plead Guilty
Posted on 30 Oct 2012 by Jordan D. Maglich

After pleading guilty five years ago to masterminding a $29 million Ponzi scheme, a 76-year old Pennsylvania man now wants a federal judge to allow him to stand trial on claims that his now-deceased defense attorney "coerced" him to plead guilty... Read More

  • Blog Post: Madoff Losses Down from $65 Billion to $20 Billion

    How do you value fraud? When the Madoff ponzi scheme collapsed the claim was that there was $65 billion in losses. That was the total dollar value on the account statements given to investors. Of course, that number was fictional because there were not real assets behind those numbers. The trustee...
  • Blog Post: Discovering the Madoff Scheme by 1997-1998

    The saga of Ponzi scheme king Bernard Madoff continues with the filing of a new action by New York Attorney General Andrew Cuomo against an investment adviser who is alleged to have had information of the fraud by the late 1990s. The complaint suggests that millions of dollars in investor losses...
  • Blog Post: SEC Censure for Failing to Conduct Due Diligence

    The SEC censured and fined an investment adviser for due diligence lapses. Yosemite Capital Management, LLC and its managing director, Paul H. Heckler, got a wrist slap for failing to disclose to clients that they had encountered substantial problems when attempting to perform the due diligence....
  • Blog Post: Dealing with Losses From the Madoff Fraud

    One of the many repercussions of the Madoff fraud is how to treat investors who had money in his Ponzi scheme. T here has been plenty written about how the trustee is treating the direct investors. He is only treating net cash. If you took out more cash than you put in, you are on the hook. That...
  • Blog Post: Measuring the Success Of SEC Enforcement

    For over a year an a half, there has been on-going effort to rejuvenate SEC enforcement. Enforcement has new personnel, new organization and new initiatives. During this process the SEC's market crisis investigations have yielded some significant cases such as the action against Goldman Sachs...
  • Blog Post: The Corruption of Scott Rothstein

    In Miles Away... Worlds Apart , Alan Sakowitz tells the story of the biggest financial fraud in South Florida history, from his unique perspective of a whistleblower. Throughout the book Sakowitz compares his close-knit neighborhood to the Scott Rothstein's greed. Sakowitz takes us through...
  • Blog Post: Rosand Enterprises and Real Estate Fraud

    I find looking at fraud cases instructive, seeing common themes, failures and techniques. Since my company is in real estate, real estate fraud catches my eye. Recently the SEC brought a case against Rosand Enterprises and one of its principals, Robert A. Anderson. The Securities and Exchange...
  • Blog Post: Sentences in White Collar Cases

    Congress and the public frequently express concern as to whether defendants in white collar cases are sufficiently punished. It is popular to think that defendants in these cases serve a short term at "Club Fed," a kind of country club prison, and then move on. Accordingly, over the years...
  • Blog Post: Madoff Anniversary: Scam Takes Additional Toll

    Saturday, December 11, 2010 was the two-year anniversary of the day when Bernie Madoff's sons, Mark and Andrew, contacted law enforcement officials to notify them that their father was running the largest Ponzi scheme in history. On this same day, Bernie and Ruth's oldest son, Mark, decided he...
  • Blog Post: ‘Largest Single Forfeiture In U.S. History’ Announced In Madoff Lawsuit

    NEW YORK - (Mealey's) In what is being called the "largest single forfeiture in U.S. history," the U.S. attorney for the Southern District of New York and others announced Dec. 17 that they have reached a $7.2 billion settlement with the estate of deceased investor Jeffrey M. Picower to...
  • Blog Post: A Digression for Bernie M.

    Convicted swindler Bernie Madoff has relevance to the small and midcap worlds because this is where he lived mostly - in the penny stock world of small cap stocks. He was Chairman of the Nasdaq in its early years long before Microsoft was a household name. Apparently the narcissism never stops as...
  • Blog Post: Winners and Losers in the Madoff Case

    Irving Picard, the trustee in the Madoff case, was in court last week as a panel of three judges heard arguments on whether net winners in the Madoff case ought to be able to collect money from the government. Net winners are those who took more cash out of Madoff's funds than they put in. Apparently...
  • Blog Post: Another Investment Fund Fraud Case

    The SEC continues to focus on investment fund fraud cases, filing its second action this week that contains Ponzi scheme allegations. SEC v. Beckman , Case No. 11 CV 574 (D. Minn. March 7, 2011). The SEC's most recent investment fund fraud action is against Jason Beckman and his controlled entity...
  • Blog Post: SEC Halts Fraudster’s Effort to Divert Settlement Funds

    The SEC obtained an emergency order halting the diversion of settlement payments from the Receiver of the Tom Petter's Ponzi schemes. The money was intended to compensate defrauded investors of the feeder funds. The man who operated the feeder funds and helped facilitate the Petter's fraud...
  • Blog Post: Ponzi Schemes and Sophisticated Investors

    So when you read about a small, $50 million dollar, Ponzi scheme coming to light, you almost always read about some gullible investors who had no idea they couldn't make 50% returns in a legitimate business deal. The list of victims was recruited from friends or family in an affinity fraud and...
  • Blog Post: Fraud Professionals are the Real Winners in Madoff Case

    The fees paid to fraud professionals such as attorneys, consultants and accountants to clean up the mess that Bernie Madoff's famous Ponzi scheme left is projected to reach over $1 billion! According to the Washington Post the fees paid to such professionals last year were almost $300 million...
  • Blog Post: A Different Kind of Ponzi Scheme

    In recent months the SEC has brought dozens of Ponzi scheme cases. Most are similar if not the same with promises of guaranteed returns and safety tied to some proprietary scheme such as trading in currencies or foreign securities or perhaps investing in TARP. The scheme ends with the promoters hand...
  • Blog Post: A Ponzi Scheme Case with a Better Ending

    Ponzi scheme cases are now a staple of SEC enforcement. Over the last year or more the Commission has brought dozens of these cases. Most have the same common elements. The promoter has a trading or investment system. The investment is safe potential investors are told. It also has good returns....
  • Blog Post: Relief Defendants May Be Able to Keep Assets from Fraudster

    The Second Circuit Court of Appeals vacated a preliminary injunction secured by the SEC and the CFTC freezing the assets a spouse received in a divorce settlement from her former husband who ran a massive Ponzi scheme. The court held that the agencies are only entitled to obtain disgorgement of ill...
  • Blog Post: Former FBI Agent and Wife Charged with Investment Fraud

    There is little new about another investment fund fraud or Ponzi scheme case except of course the victims. For whatever reason, these cases were rare prior to the time Bernard Madoff was arrested. Since the King of Ponzi schemes was trotted off to jail however the Commission has brought dozens -...
  • Blog Post: SEC Halts $35 Million Ponzi Scheme

    The Securities and Exchange Commission announced that it obtained an emergency order freezing the assets of a Texas man accused of operating a $35 million Ponzi scheme through the sale of distressed mortgages. James G. Temme, 42, of Plano, and the entities he controls, including Stewardship Fund...
  • Blog Post: CFTC Obtains Consent Order in $14 Million Forex Ponzi Scheme

    The U.S. Commodity Futures Trading Commission announced it had obtained a consent order imposing permanent trading and registration bans against a California man and two companies along with civil monetary penalties totalling nearly $7 million. Scott Bottolfson and Spirit Investments, Inc. ("Spirit"...
  • Blog Post: SEC Files Enforcement Action Against Feeder Fund of Petters Ponzi Scheme

    The Securities and Exchange Commission ("SEC") filed civil charges against a Minnesota hedge fund and two employees, alleging that they facilitated the $3.65 billion Ponzi scheme orchestrated by Thomas Petters by funneling $600 million in customer funds and subsequently attempting to ...
  • Blog Post: SEC Disciplines Eight Employees Over Failure to Detect Madoff Fraud

    The Securities and Exchange Commission disclosed that it had disciplined eight employees in connection with their failure to detect the massive Ponzi scheme orchestrated by Bernard Madoff. The employees received various forms of punishment over the past year that was made public by a Washington...
  • Blog Post: SEC Files Lawsuit Against SIPC in Dispute Over Coverage of Stanford Ponzi Scheme

    In a likely unprecedented move, the Securities and Exchange Commission ("SEC") filed a lawsuit against the Securities Investor Protection Corporation ("SIPC") as the culmination of a six-month effort to force SIPC to compensate victims of R. Allen Stanford's $7 billion Ponzi...