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Joel Barry Gillis, president of a Calabasas, California firm that was used to operate a Ponzi scheme that bilked investors out of over $100 million, pleaded guilty this week to federal fraud charges. Edward Wishner, the second man charged, pleaded guilty earlier this month. The fraud is believed to have lasted thirteen years and scammed about 2,000 investors who were told that their money would be used to buy profitable automated teller machines.

Both men pleaded guilty to conspiracy, two counts of mail fraud, and one count of wire fraud. They face a maximum sentence of eighty years in federal prison at their sentencings scheduled for March 30.

According to court documents, Gillis and Wishner ran Nationwide Automated Systems, Inc. (NASI), which claimed to place, operate, and maintain ATMs in high-traffic locations, such as hotels, casinos, and convenience stores. NASI further claimed to operate about 31,000 ATMs and engaged in over $1 billion in ATM transactions a month.

The pair’s victims paid a flat amount to purchase ATMs to be installed at specific locations. They then told investors that they would lease back the ATMs and pay investors fifty cents for each transaction made at their particular ATM, guaranteeing twenty percent annual returns on each ATM.

The overall operation was a fraud. The pair paid back some victims, but that money came from other investors, the defining element of a Ponzi scheme. The scheme collapsed this past summer when NASI bounced $3 million in checks.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

Alberto Alba Villarreal was sentenced in Cameron County State District Court (Texas) to five years in prison having previously been convicted of theft of property. Villarreal stole money that was supposed to be used to fund a new insurance company. He was also ordered to pay full restitution to an investor who purchased a $1 million investment contract in Nafta Holdings LLC and sentenced to ten years probation for securities fraud.

Villarreal is believed to have used investor money to pay his personal expenses, including back-due mortgage payments and payments on a yacht. He also used investor money to pay insurance claims to policy holders in other insurance companies he controlled.

Villarreal also allegedly engaged in a series of financial deceptions to raise money for Nafta Holdings, telling his investor that the Texas Insurance Code required $4 million in capital and surplus cash to start an insurance company. However, when he said that in 2008 that was approximately double the amount required by law.

Villarreal represented to the investor he had raised half of the $4 million needed and any funds from the investor would be placed in escrow until the threshold was reached. Villarreal further told the investor that he already had a $2 million certificate of deposit which would constitute his half of the investment in the new insurance company. What he failed to disclose to the investor, however, was that the CD contained proceeds of a loan he had taken out and that the CD was already 100% pledged to First National Bank.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

Federal criminal prosecutors in New Jersey have charged Aleksandr Milrud of Ontario, Canada with one count of wire fraud and one count of conspiracy to commit securities fraud. Milrud was arrested at a house he owns outside of Miami, Florida. The SEC has also filed a civil case against him.

Milrud is believed to have manipulated stock prices through a process known as ‘layering,’ which involves making false orders to create the illusion of increased activity in a stock or other asset in order to change its price. This marks the first case of its kind to be brought against a trader in the stock market.

Both the SEC and the federal prosecutors believe that Milrud utilized a network of foreign traders and brokerage account to place false orders for individual stocks to move their prices in a specific direction. Those orders would be canceled before they could be filled, but traders under Milrud would also make actual trades in the stocks in order to take advantage of their temporarily inflated or depressed prices.

According to prosecutors, Milrud hired a software company to program “hotkeys” so orders could be made and canceled using just a few keyboard strokes. Milrud allegedly believed his fake orders would be untraceable, but U.S. authorities convinced the owner of an offshore broker-dealer he was using to cooperate with their investigation. Prosecutors said Milrud explained his scheme in detail to the cooperator.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

The SEC has filed a civil suit against David Thibeault, an alternative fund manager, nearly a month after he was arrested by the FBI on charges of securities fraud. The SEC made many of the same allegations against Thibeault that the FBI made, specifically accusing him of funneling around sixteen million dollars in assets from the GL Beyond Income Fund, of which he was portfolio manager. That fund invested primarily in individual consumer loans and held roughly $42.6 million in total assets as of December 8.

Thibeault allegedly took out fictitious loans through an intermediary he controlled called Taft Financial Services in order to move cash from the fund. Thibeault claims that there is more to the story than meets the eye but was unable to comment further, adding that “[w]hat occurred here is pretty bizarre.”

Allegedly, Thibeault’s scheme began in 2013 after GL started losing money. Documentation for the loans taken out through Taft was in some cases either erroneous or missing, and some included incorrect dates of birth for the borrowers. According to the SEC, “Thibeault began a scheme to use the fund’s money to support his faltering financial advisory businesses.”

The SEC is asking for civil penalties and disgorgement of the purportedly illicit gains.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

John Harder, former CEO of an Oregon-based chain of retirement centers, pleaded guilty yesterday to charges pertaining to a complicated scheme that officials claim defrauded investors out of $130 million. Prosecutors will ask for a fifteen year prison term at his sentencing; Harder’s attorneys will ask for five years.

Assistance U.S. Attorney Allan Garten stated that Harder ran a “classic fraud scheme,” soliciting money from investors and banks while his Sunwest Management chain of over 300 assisted-living centers collapsed.

Harder pleaded guilty to mail fraud and engaging in monetary transactions in property derived from unlawful activity. Other charges were dropped when Harder reached a plea agreement. Garten stated that Harder misrepresented to investors that Sunwest was successful when, by early 2006, it was bleeding cash “hand over fist.”

In an attempt to conceal the losses, Harder bought more than one hundred assisted-living centers at an average of one per week. Harder allegedly commingled investor funds in Sunwest-controlled companies and misrepresented to investors about its financial strength and practices.

Garten stated Harder lived an extravagant lifestyle while defrauding over a thousand investors in the scheme. A number of investors packed the standing room-only courtroom, but all declined U.S. District Judge Michael Simon’s offer to speak.

After Garten made his case for the government, defense attorney Chris Schatz told the judge, “Basically, we don’t agree with anything Mr. Garten just said.”

In another case, the SEC filed suit in 2009 alleging Harder of committing securities fraud. The SEC sought up to $190 million in civil penalties, but a judge struck down the attempt.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

Gregg Amerman, an investor who the U.S. Commodity Futures Trading Commission accused of moving funds into a $13.5 million Ponzi scheme, has requested that the U.S. Court of Appeals for the Eleventh Circuit reverse the trial court’s summary judgment for the CFTC, asserting that he was not a commodity pool officer and had no knowledge of the colossal fraud. Specifically, Amerman stated that he was not aware that Coyt Murray, CEO of Tech Traders Inc., was running a Ponzi scheme when Amerman recruited his friends to the business and gave some of his own money to the company. Amerman further claims that the summary judgment was grounded on the incorrect assumption that he knowingly engaged in the scheme.

Amerman’s attorney stated, “The CFTC does not have any evidence that Amerman knew about the trading activities of Murray and Tech Traders or that Amerman created Tech Traders business summary, the investment summary, or any documents dealing with futures trading.”

Tech Traders, which was known as a super-fund, was shut down subsequent to a fraud suit brought by the CFTC against it in 2004. In that case, Murray and Tech Traders allegedly defrauded investors by misappropriating cash and misrepresenting how Tech Traders was performing.

The CFTC filed its complaint against Amerman in 2007, claiming that he solicited more than $1,169,000 from roughly twenty-two people and combined their investments into a commodity pool named Dream Venture Group LLC. Allegedly, Amerman subsequently invested that money in Tech Traders, which agreed to pay Amerman a broker’s fee based on profits from trading the funds. The CFTC claims that after Tech Traders shut down, Dream Venture investors lost more than $800,000 and Amerman kept $810,000 for himself.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

This week Robert Van Zandt, a tax preparer from the Bronx, New York, was sentenced to up to eleven years in prison, having previously pleaded guilty in November to operating a multimillion dollar Ponzi scheme. His victims said they trusted him with their life savings for decades, but he stole $4.8 million from them, leaving them with nothing. He would take investments from new clients to pay back older clients and take money for himself, the defining elements of a Ponzi scheme.

Van Zandt told investors that he would put their money into real estate projects that were impossible to build. He promised high return rates on the investments he offered but later admitted to stealing from 29 investors. His victims each lost between $25,000 and $900,000. One of his victims called Van Zandt “the workingman’s Bernie Madoff.” A number of Van Zandt’s investors had known him for decades and had come to trust him tremendously.

New York State Attorney General Eric Schneiderman stated that Van Zandt betrayed his clients’ trust and stole their life savings. He hopes that exposing Van Zandt’s crimes will prevent others from becoming victims in Van Zandt’s or similar schemes.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

Perry Sawano of Wheat Ridge, Colorado, a suburb of Denver, was indicted by a Jefferson County grand jury for running a Ponzi scheme that bilked investors out of $4.8 million from 2007 to 2013. Sawano was indicted on seventeen counts: five counts of securities fraud and twelve counts of theft over $20,000.

Sawano allegedly ran the scheme using his Integrity Financial Consulting firm, acting as a licensed investment adviser and investment adviser representative. At first, clients’ money was invested in traditional custodial entities. From time to time, Sawano would then move the investors’ funds out of those traditional financial instruments and into alternative investments without telling the investors. These alternative investments included businesses owned and operated by Sawano, himself.

Sawano is believed to have lied to investors about his business operations and where he would put investments. Often times, investors money would be used to pay other investors, or Sawano would place the cash into shell company bank accounts he owned or controlled, classic elements of a Ponzi scheme.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

In the wake of an alleged multi-million dollar Ponzi scheme run by attorney Anthony J. Lupas, the Pennsylvania Supreme Court has adopted new rules for attorneys in order to deter similar behavior in the future.

According to changes to the Rules of Professional Conduct, lawyers will be banned from “brokering, offering to sell, selling or placing any investment product unless he or she is separately licensed to do so.” Lawyers will also be prohibited from recommending or offering investment products if they have a financial interest in the transaction. The new rules further require attorneys to maintain detailed ledgers on client money and allow for the immediate suspension of attorneys who do not promptly provide financial records to the Office of Disciplinary Counsel.

According to prosecutors, Lupas conned a number of his clients by guaranteeing annual tax-free investment returns of seven percent or greater. Lupas, however, allegedly took their money for himself, using cash from new investors to pay earlier investors. His scheme collapsed in 2011 when Lupas was injured in a fall in his office and was unable to keep up with the payouts.

Chief Justice Ronald Castille stated that “the Lupas matter is one of the most egregious cases of attorney theft of clients’ escrow funds that I have seen in the 20 years that I have been on the Supreme Court.” A spokeswoman for the Administrative Office of Pennsylvania Courts confirmed that the Lupas case influenced them into making new rules.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.

Yesterday, FINRA fined Monex Securities Inc. $1.1 million plus interest in disgorgement of commissions obtained by unregistered foreign individuals who sold securities for the firm. FINRA imposed an additional fine of $175,000 for not registering the foreign representatives and for related supervisory deficiencies over a two and a half year span. Also, Monex’s President and Chief Compliance Officer, Jorge Martin Ramos Landero, has been suspended from acting in a principal capacity for forty-five days and was fined $15,000.

To comply with FINRA’s rules, associated individuals engaged in the investment banking or securities business must be registered under the appropriate category of registration. Additionally, the individuals must pass the appropriate qualification exam.

According to FINRA, Monex’s CCO entered an agreement on behalf of the company with its Mexican parent company that allowed a number of employees to conduct securities business on Monex’s behalf by collecting client information needed to open account, making investment recommendations, and transmitting orders.

Monex paid these individuals transaction-related compensation. Yet, none of them were registered in any capacity with FINRA. Monex also failed to establish, maintain and enforce supervisory systems and written procedures to ensure compliance with applicable securities laws and regulations.

Monex neither admitted nor denied the charges but consented to the entry of FINRA’s findings.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-390-0036 to discuss your potential legal remedies or visit frankowskifirm.com.