Ponzi Scheme

David Ferwerda and Sandra Ferwerda Accused of Selling Woodbridge Mortgage Fraudulent Investments

June 25, 2018 | 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 public filings two of Woodbridge’s agents appears to be David and Sandra Ferwerda (Ferwerda). David Ferwerda was formerly associated with Signator Investors, Inc. (Signator Investors) out of the firm’s Grand Rapids, Michigan office location. In March 2018 Ferwerda was terminated from Signator Investors for involvement in the sale of unapproved outside investments in violation of firm policy.

Federal securities laws and the FINRA rules require firms to monitor and supervise its employees, like Ferwerda, 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.

ARO Equity and Thomas Renison Investor Recovery Options

June 24, 2018 | by Staff Attorney

The 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.

Defrauded Investors: SEC Accused First Nationle Solution, United RL Capital, and Percipience Global of Being a $102 million Ponzi Scheme

June 23, 2018 | by Staff Attorney

The law offices of Gana Weinstein LLP are investigating the Securities and Exchange Commission’s (SEC) charges and asset freeze against several individuals and companies behind what the agency calls a $102 million Ponzi scheme that defrauded investors throughout the country. According to the SEC’s complaint, the defendants misled 600 investors through sales of securities in issuers First Nationle Solution LLC (First Nationle), United RL Capital Services (United RL), and Percipience Global Corp. (Percipience Global). The so-called advisors involved charged by the SEC include Perry Santillo, Christopher Parris, Paul LaRocco, John Piccarreto, and Thomas Brenner (the Advisors).

The SEC alleged that investors were solicited by the Advisors after they had acquired the brokerage practices from retiring investment advisors or through a sale of their business. After the business was acquired investors were told that their funds would be invested in companies with guaranteed dividends returns. However, the SEC alleges that the defendants stole $20 million of investor funds, paid $38.5 million in Ponzi payments to other investors, and transferred the remainder in transactions that the SEC believes was unrelated to the companies’ claimed businesses.

The SEC provides an example of the Advisors use of stolen investor funds. The SEC alleges that Santillo used stolen money to fund a jet-setting lifestyle including paying for housing in multiple states, car leases, expenditures at a country club and a Las Vegas resort and casino. The SEC alleged that Santillo at a nightclub in Las Vegas commissioned a song about himself where the lyrics refer to (Perry) Santillo as “King Perry.” The song also allegedly contained lyrics concerning Santillo’s lifestyle with his stolen funds as: “pop the champagne in L.A., New York to Florida; buy another bottle just to spray it all over ya.”

Advisor David Zier Investigated Over ZAM Fund Investment Scheme

October 16, 2017 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor David Zier (Zier), in October 2014, was terminated by his then employer City National Securities, Inc. (City National) and was under investigation by the Securities and Exchange Commission (SEC) and FINRA. Zier was the CEO of Convergent Wealth Advisors (Convergent) through which he allegedly solicited clients for a private fund he managed called ZAM LLC (ZAM). According to regulators, from 2007 to 2014 Zier falsely told clients ZAM was profitable and gave them fabricated account statements that concealed the fund’s losses.

In October 2014, Zier was found dead in an apparent suicide. Zier’s death occurred just weeks after Convergent’s compliance officers became suspicious of the ZAM fund and began to question Zier about irregularities in ZAM’s records. It is currently unknown the total fund losses but at one time the fund had $20 million. According to the U.S. Commodity Futures Trading Commission (CFTC) Zier fraudulently solicited $2.9 million in investments in ZAM.

The allegations appear to be a value manipulation scheme that often turn into Ponzi schemes. In value manipulation frauds investment advisors provide clients with misstatement of the values of securities for the purposes of either inducing investors to continue to purchase the investment or to retain their investment position in the security. The value of a security is material information to every investor. Value manipulation schemes are most common where the securities are thinly traded or not traded at all on regular securities exchanges and the broker is the only source of information. In these cases where the asset is not regularly traded, advisors and firms may be given authority to set the value of the securities and otherwise have control over what is communicated to clients.

Regulators Accuse Yasuna Murakami, Avi Chiat, and MC2 Capital Management of Defrauding Over 50 Investors

September 16, 2017 | by Staff Attorney

The law offices of Gana Weinstein LLP are investigating reports by multiple securities regulatory agencies that Yasuna Murakami (Murakami), Avi Chiat (Chiat) and the companies and hedge funds that the two managed defrauded over 50 investors by raising $15 million and then misappropriating funds in Ponzi like fashion.

According to the SEC, From 2007 to 2016, Murakami and Chiat defrauded more than 50 investors in three hedge funds run through their investment advisory businesses, MC2 Capital Management, LLC and MC2 Canada Capital Management, LLC. The three hedge funds are the MC2 Capital Partners, LLC (Partners Fund), MC2 Capital Value Partners, LLC (Value Fund), and the MC2 Capital Canadian Opportunities Fund, LLC (Canadian Fund).

The SEC alleged that the firms and their principals violated their fiduciary duties as advisers to the funds by lying to investors about the funds’ performance, falsifying account statements, falsifying tax documents, falsifying performance letters, and providing other misleading communications to investors. According to the SEC, Murakami and Chiat continually misled investors into believing they had invested in profitable ventures when in reality Murakami and Chiat engaged in unprofitable trading that lost more than 70% of the money raised for their first hedge fund in less than two years.

SEC Charged Financial Advisor Leon Vaccarelli with Defrauding Investors in Ponzi Scheme

September 7, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating allegations by the Securities and Exchange Commission (SEC) claiming that financial advisor Leon Vaccarelli (Vaccarelli) defrauded his elderly clients out of more than $1 million.

According to FinancialPlanning, the SEC filed a complaint in federal court in New Haven alleging Vaccarelli engaged in a Ponzi scheme for more than four years. To pay his mortgage and other personal expenses, Vaccarelli allegedly did not put client funds in conventional brokerage accounts as promised and instead had some clients write checks payable directly to him and used the funds to pay for his expenses or to repay earlier investors.

Upon information and belief, as of September 7, 2017, Gana Weinstein LLP is the only firm to have brought civil claims in arbitration to help investors recovery their money from this Ponzi Scheme.

Gana LLP Files Complaint on Behalf of Dean Mustaphalli Investors (Update)

June 27, 2017 | by Staff Attorney

The law offices of Gana Weinstein LLP have recently filed a complaint on behalf of nearly a dozen investors alleging that Dean Mustaphalli (Mustaphalli) engaged in securities fraud. The claim was brought against brokerage firms Sterne Agee Financial Services, Inc. (Sterne Agee) and Interactive Brokers LLC (Interactive Brokers) alleging that the firms failed to supervise Mustaphalli’s misconduct and otherwise aided his fraud causing them approximately $3,000,000 in losses.

If you unfortunately trusted Mustaphalli with your investments there is still time to act. Gana Weinstein LLP’s securities fraud attorneys represent investors who have suffered investment losses at the hands of securities professionals. Details concerning Mustaphalli’s alleged fraud continue to surface.

On June 14th, 2017, New York Attorney General Eric T. Schneiderman announced charges against Mustaphalli and entities he controlled with defrauding elderly clients out of millions of dollars. The New York Attorney General alleged that Mustaphalli engaged in a six-year scheme to defraud clients that were elderly and near retirement by investing their money in his hedge fund and in many instances without their knowledge Schneiderman said in a statement – “As we allege, Dean Mustaphalli squandered and looted $10 million from hardworking individuals. New Yorkers deserve to know that their investments are safe—and financial professionals who won’t play by the rules will face consequences.”

Investor Recovery: Mark Sellers and Selden Companies $10 Million Investment Fraud

June 11, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating the action brought by the Department of Justice (DOJ) involving property acquired by Mark Sellers (Sellers) as part of a $10 million investment fraud scheme. According to authorities Sellers shot and killed himself on Aug. 2, 2016. The DOJ alleged that Sellers fraud scheme involved stealing approximately $10 million from approximately 100 investors through his firm, Selden Companies, LLC, from December 2007 through at least 2015.

According to the DOJ, Sellers fraudulently misrepresented to investors that he would use the funds to purchase companies and turn them around to sell at a profit. However, Sellers and his wife spent almost all of the invested funds to maintain their own lavish lifestyle. Sellers’ used investor funds for vehicles, life insurance policies, homes, jewelry, and credit card purchases laundering the invested funds through multiple bank accounts.

It has also been alleged that Sellers used former Ameriprise Financial Services, Inc. (Ameriprise) broker John Elliott (Elliott) to raise funds for the fraud. According to records kept by the Financial Industry Regulatory Authority (FINRA) Elliott working out of Overland Park, Kansas location from November 2011 through September 2016. Thereafter, Ameriprise terminated Elliott alleging “compliance policy violations related to selling away.

Tripoint Global Equities, Robert Nathan, Mark Elenowitz, and Michael Boswell Accused of Raising Funds for Hamilton Ponzi Scheme

May 28, 2017 | by Staff Attorney

The investment lawyers of Gana Weinstein LLP are investigating allegations by investors that Tripoint Global Equities, LLC (Tripoint Global) and its agents Robert Nathan, Mark Elenowitz, and Michael Boswell acted as placement agents to solicit investments tied to a massive $97 million Ponzi scheme involving the false sale of tickets for shows such as the Broadway hit Hamilton.

Tripoint Global allegedly formed a joint venture with certain entities under the control of Joseph Meli and Matthew Harriton such as 875 Holdings, LLC, 127 Holdings, LLC, Advance Entertainment, LLC, and Advance Entertainment II, LLC to sell interests in these entities.

As reported, The Securities and Exchange Commission (SEC) and the also the Department of Justice have alleged in civil and criminal charges that Joseph Meli ran a fraudulent ticket business. Meli also used other to raise funds for the ventures such as Steven Simmons who was the head of an alternative investments at Sideris Capital Partners – were also arrested on securities fraud and wire fraud charges related to the scheme.

Gana LLP Investigates Platinum Partner LP Hedge Funds Investor Losses

September 18, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating the regulatory and criminal investigations concerning the Platinum Partners LP Funds. The hedge funds include the Platinum Partners Value Arbitrage Funds and the Platinum Partners Credit Opportunities Fund.

In June, news sources began reporting that the New York-based hedge fund began liquidating its funds, after the firm’s longtime associate Murray Huberfeld (Huberfeld) was accused of arranging for a $60,000 bribe and kickback, in a Salvatore Ferragamo bag, to a correctional officers’ union official. The alleged bribe was a reward to Norman Seabrook, president of the New York City Correction Officers Benevolent Association, for directing the union’s retirement funds to investment with Platinum. The union official allegedly directed $20 million in union investments into the Platinum Partners Value Arbitrage Fund. In addition, Platinum and its chief investment officer, Mark Nordlicht, are also implicated in the probe. Both Seabrook and Huberfeld pleaded not guilty to the charges.

However, it is uncertain at this time if the bribe charges are the end of the story. Federal agents raided Platinum’s office in late June after the charges were announced for reasons reportedly separate from the bribery case. This has caused news sources to speculate as to a potentially wider fallout including the potential that the purported $1.35 billion funds may be involved in a scheme to defraud investors.