Ponzi Scheme

James Seijas Accused of Being Involved in Q3 Trading Club Scam – Investor Recovery Options

November 23, 2024 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating claims that advisor James Seijas (Seijas) has been accused by investors of engaging in a Ponzi scheme investment called 3Q Trading Club. Seijas was barred The Financial Industry Regulatory Authority (FINRA) and left the employ of Wells Fargo Clearing Services, LLC in March 2019 relating to engaging in undisclosed investment activities including undisclosed outside business activities (OBAs). If you have been a victim of Seijas’s alleged misconduct our firm may be able to assist you in recovering funds.

In November 2021 Seijas consented to sanctions and findings that he refused to appear for on-the-record testimony requested by FINRA in connection with its investigation concerning the Form U5 amendment filed by Wells Fargo. Seijas disclosed that he had been named as a defendant in a lawsuit alleging that he had misrepresented investments as part of a Ponzi scheme. Thereafter, multiple clients have filed complaints relating to Seijas’ involvement.

In an SEC complaint, the agency alleged that Michael W. Ackerman, July 1, 2017 until at least December 1, 2019, through Q3 Trading Club and Q3 I, LP raised at least $33 million from more than 150 investors through the offer and sale of securities to investors who were mostly physicians. According to the SEC, Ackerman was the principal trader of the Q3 companies and told investors he developed and used a proprietary trading algorithm that allowed him to take advantage of the volatility of cryptocurrencies when trading investor funds. In fact, Ackerman invested no more than $10 million of the $33 million raised from investors in cryptocurrencies and profits were minimal. The SEC accused Ackerman of concealing the truth from investors by preparing false financial records by doctoring screenshots showing Q3 trading account balances as well as monthly newsletters falsely reflecting that the Q3 Companies generated monthly profits of at least 15%. Further, Ackerman and his partners paid themselves about $4 million of the investors’ funds as purported licensing fees based on use of the algorithm.

Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in receiving loans from clients or selling securities sales through OBAs. The sale of unapproved investment products, fake investments that cover misappropriated funds, and other fraudulent behavior – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.

Horizon Private Equity III Ponzi Scheme Victims – Investor Recovery

September 20, 2021 | by Staff Attorney

The attorneys at Gana Weinstein LLP are currently representing investors who have been the victim of the Horizon Private Equity III, LLC (Horizon) scam. Recently, the SEC has alleged that approximately 400 investors in Horizon were defrauded in a Ponzi scheme fashion out of over $110 million. A number of Oppenheimer & Co. Inc. (Oppenheimer) advisors were involved in the scam including Horizon’s chief architect and mastermind John J. Woods (CRD# 1949233) and his families members including broth James Wallace Woods Jr. (CRD# 734272), and cousin Michael Jeremiah Mooney (CRD# 4037101).

Woods and his cohorts used and abused their trusted positions as financial advisors to solicit Horizon to their clients making claims that Horizon was a safe investment that generated 6-7% guaranteed returns, had a guaranteed rate of return, carried little risk and were extremely safe and conservative, and that the Horizon investment was sponsored or offered by Oppenheimer. In reality, Horizon was a fraudulent venture that repaid old investors with funds raised from new investors. Horizon had few to no risk disclosures and failed to provide investors with information as to the nature of the funds’ holdings or other information that investors should have been provided with. When the SEC investigated Horizon III, the regulator found that by July 2021, Horizon III had liquid assets worth less than $16 million and had only invested $20 million in dubious small real estate projects.

Our firm is representing clients who have alleged that Oppenheimer permitted Woods and his co-conspirators to perpetrate this fraudulent scheme while turning a blind eye to numerous signs of fraud. Our firm’s investigation has revealed that Woods has been under almost continuous litigation concerning his outside business activities since at least 2007. Further, Oppenheimer was subpoenaed to produce documents and records relating to Woods’ outside business dealings in at least on litigation where Woods was accused of defrauding an investor to provide capital for one of Woods’ many businesses. In addition, court records reveal that Woods stated under oath that his failed business ventures left him personally liable for loans totaling over $6 million.

Advisor Marshall Isaacson Barred By Regulator After Suitability Investigation

April 11, 2021 | by Staff Attorney

Advisor Marshall Isaacson (Isaacson), formally employed by brokerage firms National Securities Corporation (National Securities) and Newbridge Securities Corporation (Newbridge) has been subject to at least six customer complaints, one regulatory sanction, and three tax liens or judgements during the course of his career. According to a BrokerCheck report the customer complaints concerns alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements. The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

One of the products referenced in the disclosures is GPB Capital. On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme. In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.” The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud. If convicted, the defendants each face up to 20 years’ imprisonment.[1]

Investor Recovery – GPB Capital Called Ponzi-Like Scheme; Fund Managers Indicted

February 8, 2021 | by Staff Attorney

The law offices of Gana Weinstein LLP continue have represented over 100 investors defrauded in GPB Capital relating investments. For nearly two years our firm has been filing complaints against the brokerage firms that wrongfully sold these products alleging that GPB Capital has all the tell-tale signs of being a scam. On February 4, 2021 the U.S. Securities and Exchange Commission (SEC), the U.S. Attorney’s Office for the Eastern District of New York (DOJ), and seven states filed separate simultaneous actions against GPB Capital and other defendants connected to the firm accusing it of being a Ponzi-like scheme. In a press release the SEC stated that it “charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion…”[1]

As reported by Bloomberg “If proved, [GPB] would be one of the largest such schemes to target individual investors since the massive frauds of Bernard Madoff and Robert Allen Stanford came to light.”[2] The DOJ indicted David Gentile, the founder of GPB, Jeffry Schneider, the owner and CEO of Ascendant Capital LLC, and Jeffrey Lash, a former managing partner of GPB relating to the fraud. If convicted, the defendants each face up to 20 years’ imprisonment.[3] New York Attorney General Letitia James accused GPB of “defrauding investors across the country out of more than $700 million through a Ponzi-like scheme that offered to pay investors generous monthly distributions they could never deliver.”[4] Further, “Investors put in more than $1.8 billion into GPB funds but were left without a single cent of profit,” said Attorney General James. The fraud was alleged to have been carried out by “failing to disclose numerous conflicted transactions involving related parties, as well as misappropriations of fund assets, all of which served to benefit” GPB and its owners.

Where did investor money go? “Investor funds were spent to subsidize private planes and luxury travel for the three defendants, direct payments totaling millions of dollars into personal bank accounts, and payments to family members. Defendant Gentile even purchased a Ferrari sports car with investor funds.” Id. Continue Reading

SEC Alleges Investment Fraud – EquiAlt LLC – Recovery Options

May 9, 2020 | by Staff Attorney

The attorneys at Gana Weinstein LLP are investigating potential claims against brokerage firms for selling securities issued by entities related to EquiAlt, LLC. EquiAlt purports to be a private real estate company with at least four private placements offerings: EquiAlt Fund, LLC; EquiAlt Fund II, LLC; EquiAlt Fund III, LLC; and EA Sip, LLC.

On February 18, 2020, the Securities and Exchange Commission (SEC) filed an emergency enforcement action and sought to obtain a temporary restraining order along with an asset freeze against EquiAlt LLC, its CEO Brian Davison, and its Managing Director Barry Rybicki. The SEC alleged that the action was being made in connection with EquiAlt’s alleged fraudulent unregistered securities offering that raised more than $170 million from at least 1,100 investors.

According to the SEC’s complaint, in the U.S. District Court for the Middle District of Florida, EquiAlt, Davison, Rybicki, and the other entities involved in the claimed fraud, raised millions of dollars by making material misrepresentations and false claims to investors about EquiAlt’s investment strategy. The SEC claims that the EquiAlt told investors they would pool investor funds and use approximately 90% of the money to purchase under-valued real estate, rent or flip the properties, and pay investors 8-10% annual interest generated from the real estate investments. However, as in the case with so many frauds, the SEC is claiming that a large portion of investor money went to support Davison’s and Rybicki’s lavish personal spending and that in fact less than 50% of the funds raised were used to invest in properties and other legitimate purposes. The SEC is claiming that money from one investment fund controlled by EquiAlt was allegedly used to make Ponzi-like payments to investors in another fund. Such commingling of funds amongst supposedly separate entities is common in Ponzi-schemes.

Roger Owens Terminated Over Sale of Fraudulent Woodbridge Mortgage Investments

March 25, 2020 | by Staff Attorney

The 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) Roger Owens (Owens) appears to be an agent for Woodbridge fraudulent note sales. Owens was formerly associated with Cetera Advisors LLC (Cetera) out of the firm’s Elkton, Maryland office location. Owens has four complaints related to his Woodbridge note sales.

In addition, in August 2019 FINRA found that Owens consented to sanctions and findings that he engaged in private securities transactions without providing notice to Cetera. FINRA determined that Owens solicited investors to purchase promissory notes relating to a purported real-estate investment fund [Woodbridge]. Owens was found to have sold at least $1,170,000 in promissory notes to investors while receiving $59,471 in commissions in connection with these transactions. FINRA also found that Owens falsely attested in compliance questionnaires that he had not engaged in any private securities transactions without receiving prior written approval from his firm.

GPB Capital Alleged to Have Been Sold by Purshe Kaplan Even After Compliance Discovered Red Flags of Fraud

December 22, 2019 | by Staff Attorney

According to a compliance officer with Purshe Kaplan Sterling Investments, Inc., (Purshe Kaplan) the firm continued to sell securities offered by GPB Capital Holdings (GPB Capital) after she had reported misgivings as to the entities business model and recommended that the firm not sell the product. According to court documents, the compliance officers responsibilities included reviewing new product offerings, regulatory disclosures, and conducting monthly and quarterly compliance reviews among other duties.

In January 2016, the compliance officer raised concerns about GPB Capital and did not recommend that the product be added to the Purshe Kaplan platform based upon her finding that members of senior management at the sponsor of the product were using investor funds for personal business interests. However, Purshe Kaplan dismissed her concerns and re-reviewed GPB Capital without the compliance officer’s input. Further, Purshe Kaplan instructed the compliance officer not to raise concerns about the product before it was offered to purchasers. Moreover, it was alleged that less experienced personnel were given the role to evaluate GPB Capital. If these allegations are true Purshe Kaplan may have intentionally withheld material information from all of its investors concerning GPB Capital.

One private placement that a large number of clients of Purshe Kaplan were sold is GPB Capital related investments. GPB Capital is facing multiple accusations of being a Ponzi scheme, an ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officer being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. While advisors have been telling investors to do absolutely nothing and just hang in there – this is nothing more than just additional poor advice. In November 2019 GPB Capital’s admitted that no financial audit would occur anytime in the near future. In sum, investors now know there is nothing to hang onto. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

Advisor Darren Kubiak Suspended by FINRA and Has Complaint Over GPB Capital

December 10, 2019 | by Staff Attorney

Our firm represents multiple clients who have collectively lost millions in the sale of fraudulent GPB Capital Holdings (GPB Capital) related investments. Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review these offerings in any significant detail. Any serious due diligence would have revealed that GPB Capital was an investment fraud scheme.

Advisor Darren Kubiak (Kubiak), according to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), has been accused of selling GPB Capital. Kubiak is formerly registered with member firm Kalos Capital, Inc. (Kalos Capital). In addition, Kubiak disclosed three total customer complaints and one FINRA regulatory action. If you have been a victim of Kubiak’s alleged misconduct our firm may be able to assist you in recovering funds.

FINRA alleged in a regulatory filing that Kubiak consented to sanctions and findings that he recommended the purchase of leveraged and inverse exchange traded funds (LIETFs) to customers without having a sufficient understanding of the risks and features associated with the LIETFs. FINRA found that Kubiak failed to have a reasonable basis to make these recommendations. In addition, according to FINRA Kubiak recommended these customers purchase LIETFs then held them for an average of 722 days causing Kubiak’s customers to incur approximately $98,000 in losses. FINRA found that Kubiak failed to perform reasonable due diligence and accordingly did not understand that LIETFs are generally expected to lose value over time and that losses are compounded because of daily resets.

Advisor Luke Johnson Accused of Selling Fraudulent GPB Capital Investments

December 8, 2019 | by Staff Attorney

Our firm represents multiple clients who have collectively lost millions in the sale of fraudulent GPB Capital Holdings (GPB Capital) related investments. Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review these offerings in any significant detail. Any serious due diligence would have revealed that GPB Capital was an investment fraud scheme.

Advisor Luke Johnson (Johnson), according to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), has been accused of selling GPB Capital. Johnson is currently registered with member firm Coastal Equities, Inc. (Coastal Equities). In addition, Johnson disclosed seven total customer complaints. If you have been a victim of Johnson’s alleged misconduct our firm may be able to assist you in recovering funds.

Our firm’s investigation has found that brokerage firms failed to conduct due diligence and investigate multiple aspects of GPB Capital’s business including its senior management, fantastical business claims, and intra-fund lending practices. For instance, with respect to GPB Capital’s senior management the company was founded by David Gentile (Gentile). Had brokerage firms investigated GPB Capital’s senior manager it would have found that prior to founding GPB Capital, Gentile’s experience was as a CPA and company advisor with the accounting practice his family ran at Gentile Pismeny & Brengel, LLP (GP&B) in New York. Nonetheless, GPB’s PPMs claimed expertise in these areas. GPB Holdings II, LP, PPM, pg. 9 (Apr. 13, 2015) (“GPB’s senior management have a great deal of experience investing in the Automotive Retail, Managed IT Services and Life Sciences sectors.”).

James Heafner Allegedly Sold Fraudulent 1st Global Capital Securities

May 21, 2019 | by Staff Attorney

The attorneys at Gana Weinstein LLP are looking into potential actions to help investors ensnared in the 1^st Global Capital LLC (1^st Global Capital) investment fraud scheme. According documents filed by The Securities and Exchange Commission’s (SEC) it appears that some of the victims were brought to 1st Global by brokers who formerly worked for Taylor Capital Management (Taylor Capital). These advisors include James Heafner (Heafner) and Trae Wieniewitz (Wieniewitz). Heafner operated out of a d/b/a company called Heafner Financial Solutions, Inc.

In August 2018 Heafner’s employer terminated him alleging that he failed to follow written policies concerning the firm’s outside business activities. In addition, Heafner has three customer complaints alleging that the clients lost funds in the now defunct 1^st Global Capital scheme.

As revealed in court documents and the complaint filed by SEC – 1^st Global Capital engaged in a four year unregistered securities offering overseen by Carl Ruderman (Ruderman) – also charged. The SEC has alleged that more than 3,400 investors nationwide have been caught in the company’s $287 million fraud.