LexisNexis® Legal Newsroom
Victims of $200 Million Ponzi Scheme Set to Recover 9% of Losses

Nearly six years after a raid by the Federal Bureau of Investigation uncovered a $200 million Ponzi scheme masterminded by Tim Durham, a bankruptcy trustee tasked with recovering funds for scheme victims has announced his intention to make a first distribution representing 8% - 9% of victim losses. Victims...

Banker Tied to Rothstein's Massive Ponzi Scheme Will Plead Guilty

Just before his trial was scheduled to begin next month, a former TD Bank vice president will plead guilty to a wire fraud conspiracy charge related to his relationship with convicted Ponzi schemer Scott Rothstein. Frank Spinosa, 54, is scheduled to plead guilty to a single count of wire fraud conspiracy...

September 2015 Ponzi Scheme Roundup

Below is a summary of the activity reported for September 2015. The reported stories reflect: 5 guilty pleas or convictions in pending cases; over 41 years of newly imposed sentences for people involved in Ponzi schemes; at least 3 new Ponzi schemes; and an average age of approximately 52 for the alleged...

Self-Described "Idiot" Charged With $1.5 Million Ponzi Scheme

A New Jersey man was charged with multiple violations of federal securities laws for operating what authorities allege was a Ponzi scheme that duped investors out of over $1.1 million. William Wells, along with his company, Promitor Capital Management, LLC ("Promitor"), was named in a complaint...

Lawyers Seek Approval to Distribute Clawback Recoveries to Ponzi Victims

Victims of one of the largest Ponzi schemes uncovered in Ohio could soon receive a partial return of their losses based on efforts by attorneys to "claw back" fictitious profits paid to some investors. Attorneys representing victims of Glen Galemmo's $35 million Ponzi scheme are set to...

Supreme Court Rejects Time-Based Damages for Madoff Victims

The U.S. Supreme Court refused to hear an appeal over whether victims of Bernard Madoff's historic Ponzi scheme were entitled to an inflation-based upward adjustment of their losses, freeing approximately $1 billion for future distributions to victims and bringing finality to an appellate court's...

TelexFree Trustee Seeks Approval For "Unprecedented" Electronic Claims Process

"The Debtors’ operations constituted a massive Ponzi /pyramid scheme." - Court appointed trustee Stephen B. Darr The court-appointed Bankruptcy trustee responsible for marshaling assets for victims of the massive alleged $3 billion TelexFree Ponzi/pyramid scheme has asked a Massachusetts...

Bank Hit With $72 Million Judgment for Role in $100 Million Ponzi Scheme

An Ohio-based bank was tagged with a $72 million judgment - ballooning to nearly $83 million with accrued interest - for its role in providing banking services to a notorious Ponzi schemer who committed suicide as authorities closed in. Huntington Bank, a publicly-traded company with hundreds of branches...

After Mistrial, Feds Will Retry Cay Clubs Founder In November

Authorities are hoping that Fred Davis Clark's good luck streak has finally run out. The founder of Cay Clubs, which has been accused by civil and criminal authorities of operating a massive $300 million Ponzi scheme that duped scores of investors with promises of lucrative returns through timeshare...

Madoff Victims Who Lost $1.1 Million or Less Will Soon Be Fully Repaid

The court-appointed bankruptcy trustee for Bernard Madoff's massive Ponzi scheme is seeking to make a sixth distribution to Madoff's defrauded victims that, if approved, would fully repay victims with losses of $1.1 million or less. Trustee Irving Picard has scheduled a hearing for November 18...

After Failed Suicide Attempt, Ex-Biglaw Lawyer To Plead Guilty To $5 Million Ponzi Scheme

A former Biglaw lawyer who was charged with operating a $5 million Ponzi scheme after surviving a Ponzi scheme will reportedly plead guilty to fraud charges. Charles Bennett, a former lawyer at renowned law firm Skadden Arps Slate Meagher & Flom LLP, was arraigned from his hospital bed late last...

Rothstein "Independent Asset Verifier" Gets 30-Month Sentence

A south Florida investment advisor who once served as a financial advisor to convicted Ponzi schemer Scott Rothstein has been sentenced to a 30-month term for his role in the scheme. Michael Szafranski, 37, received the sentence from U.S. District Judge Dimitrouleas after previously pleading guilty to...

Florida Woman Gets 9-Year Sentence for $25 Million Ponzi Scheme

A Florida woman whose company promised weekly returns of up to 50% will spend the next nine years in prison after pleading guilty to running an elaborate Ponzi scheme. Jenifer Hoffman, 51, pleaded guilty earlier this year to charges of conspiracy to commit wire fraud and filing a false tax return. She...

October 2015 Ponzi Scheme Roundup

Below is a summary of the activity reported for October 2015. The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 93 years of newly imposed sentences for people involved in Ponzi schemes; at least 4 new Ponzi schemes; and an average age of approximately 54 for the alleged...

Ohio Couple Charged With $70 Million Ponzi Scheme

An Ohio husband and wife face criminal and civil actions on charges that they operated a massive Ponzi and pyramid scheme that is believed to have taken in at least $70 million from nearly 500 victims. An indictment returned by an Ohio federal grand jury charges William M. Apostelos and his wife Connie...

Trial Begins Friday for 20-Year Old Nightclub Owner Accused of $500,000 Ponzi Scheme

Trial begins Friday for a Connecticut teenager accused of operating a Ponzi scheme that duped friends and family - including his parents - out of $500,000. Ian Bick, now 20, is facing eleven counts of wire fraud, three counts of money laundering, and one count of making a false statement to law enforcement...

SEC Brings Actions Against Ponzi Schemer, Client

Ponzi scheme cases have, of course, become a staple of SEC enforcement since the discovery of Madoff’s unprecedented scheme. While there seems to be a virtually endless number of these cases centered on the proverbial “too good to be true” scheme, the agency may have uncovered a new...

Criminal Charges Filed Against Co-Founder of "Triple Algorithm" Ponzi Scheme

North Carolina prosecutors have filed criminal charges against a Michigan man accused of masterminding a massive Ponzi scheme that duped over 10,000 victims out of at least $7 million by telling them he could deliver outlandish returns exceeding 700%. Troy Barnes, 53, was charged with one count of wire...

Jury Holds Ernst & Young Liable for Madoff Losses

A Washington jury has found accounting firm Ernst & Young ("E&Y") liable for at least $10 million of losses suffered by a Washington investment company that invested in Bernard Madoff's infamous Ponzi scheme through a "feeder fund" audited by the firm. FutureSelect Portfolio...

Jury Holds Ernst & Young Liable for Madoff Losses

A Washington jury has found accounting firm Ernst & Young ("E&Y") liable for at least $10 million of losses suffered by a Washington investment company that invested in Bernard Madoff's infamous Ponzi scheme through a "feeder fund" audited by the firm. FutureSelect Portfolio...

November 2015 Ponzi Scheme Roundup

Below is a summary of the activity reported for November 2015. The reported stories reflect: 3 guilty pleas or convictions in pending cases; over 77 years of newly imposed sentences for people involved in Ponzi schemes; at least 9 new Ponzi schemes worldwide; and an average age of approximately 54 for...

Mining for Virtual Currencies – The SEC Charges Fraud

Virtual currencies such as bitcoin have grown in popularity. With that popularity it may well have been inevitable that the SEC would bring enforcement actions centered on the new phenomenon, alleging fraud. A new variation of those actions is the predicate for the Commission’s most recent enforcement...

December 2015 Ponzi Scheme Roundup

Below is a summary of the activity reported for December 2015. The reported stories reflect: 6 guilty pleas or convictions in pending cases; over 14 years of newly imposed sentences for people involved in Ponzi schemes; at least 5 new Ponzi schemes worldwide; and an average age of approximately 47 for...

January 2016 Ponzi Scheme Roundup

Below is a summary of the activity reported for January 2016. The reported stories reflect: 5 guilty pleas or convictions in pending cases; over 70 years of newly imposed sentences for people involved in Ponzi schemes; at least 5 new Ponzi schemes worldwide; and an average age of approximately 53 for...

February 2016 Ponzi Scheme Roundup

Below is a summary of the activity reported for February 2016. The reported stories reflect: 10 guilty pleas or convictions in pending cases; over 108 years of newly imposed sentences for people involved in Ponzi schemes; at least 10 new Ponzi schemes worldwide involving more than $8.6 billion; and an...