21st Century

• In 2000, a Ponzi scheme perpetrated by Scientology minister Reed Slatkin came unraveled when the U.S. Securities and Exchange Commission regulators became aware that Slatkin was not a licensed investment adviser. Slatkin had raised some $600 million from over 500 wealthy investors, mostly Hollywood celebrities.
• In 2001, the Haitian population fell prey to Ponzi schemers offering rates up to 15%. The outfits called “cooperatives” appeared to be implicitly backed by the government and became wildly popular in the population at large who felt safe since the coops were openly advertising on the radio, TV ads, and used as spokepeople Haitian pop stars. It is estimated that more than $240 million were swindled from investors, equivalent to 60% of the country’s GDP.
• The Brothers was a large investment operation, eventually exposed as a Ponzi scheme, in Costa Rica from the late 1980s until 2002. The fund was operated by brothers Luis Enrique and Osvaldo Villalobos. Investigators determined that the scam took in at least $400 million. Most of the clientele were American and Canadian retirees but some Costa Ricans also invested the minimum $10,000. About 6,300 individuals ultimately were involved. Interest rates were 3% per month, usually paid in cash, or 2.8% compounded. The ability to pay such high interest was attributed to Luis Enrique Villalobos’ existing agricultural aviation business, investment in unspecified European high yield funds, and loans to Coca Cola, among others. Osvaldo Villalobos’ role was primarily to move money around a large number of shell companies and then pay investors. In May 2007 Osvaldo Villalobos was sentenced to 18 years in prison for fraud and illegal banking. Luis Enrique Villalobos remains a fugitive.
• In 2003, the SEC closed a $1 billion scheme by Mutual Benefits Company in Florida run by Peter Lombardi affecting 28,000 investors. Mutual claimed it used the money to pay viaticals settlements to HIV patients. Lombardi is now serving a 20-year prison sentence. (registration required)
• In 2005, Angelo Haligiannis plead guilty to running a Ponzi scheme costing investors about $80 million.
• In February 2005, Moshe Leichner and his son Zvi Leichner were sentenced to 240 months in federal prison for running a Ponzi scheme through a commodities futures trading firm, Midland Euro that defrauded hundreds of investors out of more than $95 million, including Dean Tanella of GunnAllen Financial (shut down by regulators in March 2010 for fraud allegations and losses related to another Ponzi scheme) and Safe Harbor Capital Management (now dba HarborLight Capital Management) which lost $40 million for their investors.
• In December 2005, in Los Angeles, California, Larry Toshio Osaki, who ran a Ponzi scheme (of large proportion) and continued to offer bogus investments in accounts receivable factoring after being ordered to cease and desist by a Federal judge, was sentenced to 20 years in federal prison. In addition to the prison term, Judge Stephen V. Wilson ordered Osaki to pay more than $145 million in restitution to victims.
• In May 2006, James Paul Lewis, Jr. was sentenced to 30 years in federal prison for running a $311 million Ponzi scheme over a 20-year time period. He operated under the name Financial Advisory Consultants from Lake Forest, California.
• In October 2006 in Malaysia, two prominent members of society and several others were held for running an alleged scam, known as SwissCash or Swiss Mutual Fund (1948). SwissCash offered returns of up to 300% within a 15-month investment period. Currently, this HYIP investment is offered to citizens of Malaysia, Singapore, and Indonesia. It claimed investors’ funds were channeled to business activities ranging from oil exploration to shipping and agriculture in the Caribbean. The company claims to be operating out of New York and incorporated in the Commonwealth of Dominica.
• In Oct, 2006 Gregory Nathan, a Sydney fund manager, was arrested on charges including dishonest conduct and obtaining money by making false and misleading statements, in what investigators discovered to have been a Ponzi scheme. Nathan, a notorious gambler, reported returns that were always stellar, prompting many to invest their life savings. Nathan didn’t discriminate when it came to pitching his investment opportunities with victims including his mother, his girlfriend, his flatmate, the elderly and handicapped. Nathan falsely reported his fund had $22 million under management, when the most it could have had at any one time was approximately $4.9 million. From 2001 – 2006 an estimated $8.8 million was lost by an untold number of investors believed to be in the hundreds. In a desperate late bid to perpetuate the scheme, Nathan sent an email to existing clients on Oct 9, 2006 just days before placing his companies in administration, encouraging them to increase their investment. On 19 Sept, 2008, Nathan was sentenced to a total of seven years imprisonment including a five year non-parole period.
• On April 13, 2007, Sibt-e-Hassan Shah, aka “Double Shah,” was arrested by government officials in Wazirabad, a small town of Pakistan. Sibt-e-Hassan claimed to double investors’ money within 30 days in the beginning of his scheme, later extended to 90 days. He is suspected to have gathered very large investments (approx US$ 1 billion) in a very short time period.
• On June 27, 2007, former boy band mogul and notorious con artist Lou Pearlman was indicted by a grand jury on several counts of fraud which is turning out to be one of the largest and longest running United States Ponzi schemes ever. His scheme lasted for over 20 years. The final total damage may rest somewhere near $500 million. Pearlman’s scam involved bilking investors out of their savings with a fraudulent savings and loans program claiming it to be FDIC insured though it was not. On March 4, 2008, Pearlman agreed to plead guilty to charges of conspiracy, money laundering, and making false statements during a bankruptcy proceeding, and to testify for the prosecution of several accomplices, according to law enforcement officials. On May 21, 2008, Pearlman was sentenced to 300 months in jail with the stipulation that he could cut one month off his sentence for every $1 million he paid his investors back.
• On August 17, 2007, the Philippine National Bureau of Investigation (NBI) filed syndicated estafa cases against 27 officers and investors of FrancSwiss Investment, a “Ponzi” pyramiding scam on the Internet. Charged were Michael Mansfield, chief financial officer; Kurt Sandelman, risk management team leader; Rupert Benedict Da Vinco, investment team leader; Julia Rodriguez, international banking team leader; Hector Willem Sidberg, marketing and international affairs; and Fernando Munoz, customer service leader; Roger Smith, the British chief operation officer of FS Investment in the Asia-Pacific region; Bensy Fong, the Singaporean system operation officer; Raymond Chua, Singaporean marketing officer; a certain Michelle and Mike, Filipino secretaries and collectors of money from investors; 16 investors, including arrested suspect Eleazard Castillo, 26, a native of Cabuyao, Ilocos Sur, allegedly one of the financial advisers of FrancSwiss Investment. 41 investors claimed they lost a total of $75,000 to the investment scheme. FrancSwiss deceived investors in the Philippines of ₱1 billion ($50 million).
• In the third and the biggest Philippines Ponzi scam (involving $150 million and $250 million), criminal charges, based on suit filed by 21,000 complainants were filed on June, 2008, with the Department of Justice, against Performance Investments Products Corp (PIPC) officers and incorporators for violation of the Securities Regulation Code (SRC), versus: Singaporean national Michael H.K. Liew, PIPC president; Cristina Gonzalez-Tuason, general manager, and other officers and agents – Ma. Cristina Bautista-Jurado, Barbara Garcia, Anthony Kierulf, Eugene Go, Michael Melchor Nubla, Ma. Pamela Morris, Luis Aragon, Renato Sarmiento Jr., Victor Jose Vergel de Dios, Nicoline Amoranto Mendoza, Jose Tengco III, Oudine Santos and Herley Jesuitas.
• Minnesota, USA – allegedly orchestrated by Minneapolis, Minnesota celebrity businessman Tom Petters. On December 1, 2008 Tom Petters was charged by the Federal government as the mastermind behind a $3.65 billion Ponzi scheme that bilked investors over a 13-year period. Tom Petters lived an extravagant lifestyle supported by his Ponzi scheme. Petters faces 20 counts of wire and mail fraud, Conspiracy, and money laundering for the alleged investment scheme that ran from 1995 through September 2008. He is expected to plead not-guilty, but his co-conspirators in the Ponzi scheme, Deanna Coleman, Robert White, Michael Catain, and Larry Reynolds, have all pled guilty. The Petters Ponzi scheme came to an end when Petters’ top co-conspirator Deanna Coleman turned government informant and wore a wire. Petters and the others were planning to flee to countries without extradition agreements with the U.S. Deanna Coleman and Michael Catain had properties in Costa Rica. On December 2, 2009, Tom Petters was found guilty in the U.S. District Court in St. Paul, Minnesota on 20 counts of wire and mail fraud. Reporters from the Minneapolis Star Tribune stated that it is extremely unlikely that Petters will ever again live as a free citizen. The US federal government is now seeking forfeiture of all Petters’ assets. He later was convicted for turning Petters Group Worldwide into a $3.65 billion Ponzi scheme and was sentenced to 50 years in federal prison.
• Jordan : Many traders were arrested on October / November 2008 for multi-millions Ponzi Scams.
• September 15, 2008, Securities and Exchange Commission v. Jeanne M. Rowzee, James R. Halstead, and ‘Robert T. Harvey United States District Court for the Central District of California. Civil Action No. SACV 08-1025 AG (ANx)SEC Charges Bogus PIPE Promoters in $52 Million Ponzi Scheme. The Securities and Exchange Commission today charged an Irvine, Calif., attorney and two other promoters for conducting a $52.7 million Ponzi scheme in which they sold investors bogus PIPE (private investment in public equity) investments, promised unrealistic profits, and misappropriated more than $20 million of investors’ funds to function as their own personal piggy bank. Harvey misappropriated at least $2 million of Harvest Income funds to pay his personal credit card bills and other expenses. Harvey also paid himself approximately $2.3 million in purported “management fees.” Harvey had a prior conviction with SEC violations in the early 80′s and released from Federal Prison in 1987. Harvey currently operates an oil and gas investment company, Harvest Petroleum, Inc. located in McKinney, Texas. The defendants are charged with securities fraud under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and with conducting an unregistered offering under Section 5 of the Securities Act. Rowzee and Harvey are also charged with investment adviser fraud under Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and Halstead is charged with aiding and abetting violations of Sections 206(1) and 206(2) of the Advisers Act. The Commission’s complaint seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against each defendant.The Commission acknowledges the assistance of the Federal Bureau of Investigation and the California Department of Corporations in this matter.
• On December 10, 2008, Bernard Madoff made an admission to his sons that his investments were “all one big lie.” The following day he was arrested and charged with a single count of securities fraud. As of December 2008^[update] the losses were estimated to be $65 billion, making it the largest investor fraud in history. Madoff was sentenced to 150 years in prison on June 29, 2009.
• On January 9, 2009, the U.S. Securities and Exchange Commission (SEC) charged Joseph S. Forte from Bromall, PA with masterminding a $50 million Ponzi scheme. He swindled over 80 investors, mostly close friends from 1995 to 2009. The SEC investigator called Forte a “complete fraud”. Records show Forte used for his own personal use, over $28 million.
• On January 16, 2009, the Serious Fraud Office in the United Kingdom uncovered an £80 million buy-to-let property fraud scheme operating under a company called Practical Property Portfolio in which at least 1,750 investors were conned £25,000 each in return for a promise of a house in the North East of England. All five directors – John Potts (fraudster), Peter Gosling, Natalie Laverick, Peter Graham (fraudster) and Eric Armstrong – pleaded guilty to fraud and will be sentenced in March 2009.
• On January 26, 2009, Nick Cosmo, the founder of Agape World, surrendered to federal authorities in connection with a suspected $380 million Ponzi scheme. Previously convicted of fraud in 1999, Nicholas Cosmo, surrendered at the Long Island Rail Road train station in Hicksville, N.Y. In March 2009, a lawsuit was filed in New York against Bank of America, one of the largest banks in the United States, that claimed that Bank of America “established, equipped and staffed” a branch office in the headquarters of Mr. Cosmo’s firm, Agape Merchant Advance. As a result, the lawsuit contends that the bank knowingly “assisted, facilitated and furthered” Mr. Cosmo’s fraudulent scheme.
• On February 9, 2009, the City of London Police Economic Crime Department arrested Terry Freeman, director of GFX Capital Markets Ltd, over £40 million fraud which is possibly another Ponzi scheme.
• On February 17, 2009, the Stanford International Bank and proprietor Allen Stanford were accused of “massive fraud” by U.S. authorities. SIB’s assets were frozen. The apparent Ponzi scheme drew in more than $8 billion of “deposits”, many from investors in Latin America. He was arrested by the Federal Bureau of Investigation on June 18, 2009.
• On February 25, 2009, the SEC charged James Nicholson for allegedly “defraud[ing] hundreds of investors of millions of dollars”
• On March 13, 2009, a 67 year old Ohio woman named Joanne Schneider was sentenced to three years in prison, the minimum allowed, for operating a Ponzi scheme that cost investors an estimated $60 million.
• On March 13, 2009 the SEC charged Brian Jared Smart of Lehi, Utah with the security fraud from the creation of a Ponzi Scheme that targeted the elderly. The complaint claims that Smart stole OVER $2 million from his victims.
• On June 17, 2009, Donald Anthony Walker Young, who is known as Tony Young or Walker Young, had his office seized for using money from new investors to pay previous investors and “stole some of the money to purchase a vacation home in Palm Beach, Fla.” Young operated the alleged Ponzi scheme through an investment partnership Acorn II L.P., which he established in 2001 to invest in publicly traded securities, authorities said. The SEC alleged in its 22-page complaint that the fraud began in mid-2005 and continued until recently. He was indicted on April 1, 2010
• On June 2, 2009, the Colorado State Grand Jury indicted Jason Trevor Brooks of Boulder, Colorado on 24 counts of security fraud and theft. Authorities allege that from June 2005 to February 2008, Brooks collected about $10 million from investors to invest, but then used a vast majority of the funds for personal expenses, gambling, and to make interest payments and payouts to other investors. Brooks, working under the Genius Inc. name, told investors he had a distribution agreement with Matsushita Electric Industrial Co. Ltd. of Japan, which allowed him to purchase electronics and appliances as a distributor and then resell them for a profit to various home builders and other businesses, authorities said. On April 27, 2010 Jason Trevor Brooks pleaded guilty to four felony counts of securities fraud in a scheme in which he bilked investors out of $10 million. Jason was sentenced to 32 years in prison and was also ordered to pay more than $5.1 million in restitution to his victims. Brooks received eight-year prison sentences for each of the four counts to which he pleaded guilty—two counts of securities fraud and two counts of making an untrue statement.

• On June 12, 2009, investors were reported to have lost billions of South African Rands in a Ponzi scheme masterminded by Barry Tannenbaum.
• On June 22, 2009 New York hedge-fund manager Edward T. Stein pleaded guilty to running a $30 million fraud and the friends and acquaintances who he preyed on urged a federal judge to immediately jail him. Stein, 59, admitted today to four counts of securities fraud and one charge of wire fraud. He was initially accused March 31 of cheating a client out of $6.5 million. The Court also froze the assets of seven entities, which Stein controlled, and the Commission charged as relief defendants, including investment funds Gemini Fund I, L.P. (Gemini) and DISP LLC (DISP), as well as, Prima Capital Management Corp. (Prima), Edward T. Stein Associates, Ltd., Vibrant Capital Corp. (Vibrant), Vibrant Capital Funding I LLC, and G&C Partnership Joint Venture. On February 9, 2009 New York hedge-fund manager Edward T. Stein was sentenced to nine years in prison for running a $46 million Ponzi scheme that preyed upon friends and acquaintances.
• On July 27, 2009, missing financial adviser Earl Jones turned himself in to Quebec Provincial Police, weeks after provincial securities regulators said he was suspected of bilking clients out of as much as $50 million. He had been sought since early July, when Quebec’s financial watchdog, L’Authorité des marchés financiers, put a freeze on the assets of Jones’ small Montreal-based investment firm. The regulator alleged the business resembled a Ponzi scheme — a type of pyramid sales scam in which money from new investors is used to pay off the earlier ones.

On December 1, 2009 Scott W. Rothstein is a disbarred lawyer and the former managing shareholder, chairman, and chief executive officer of the now-defunct Rothstein Rosenfeldt Adler law firm. He is accused of funding his philanthropy, political contributions, law firm salaries, and an extravagant lifestyle with a massive 1.4 billion dollar Ponzi scheme. Scott Rothstein turned himself in to federal authorities and was subsequently arrested on charges related to the Racketeer Influenced and Corrupt Organizations Act (RICO). Rothstein was denied bond by U.S. Magistrate Judge Robin Rosenbaum, who ruled that due to his ability to forge documents, he was considered a flight risk. Although his arraignment plea was not guilty, Rothstein cooperated with the Government and reversed his plea to guilty of five federal crimes on January 27, 2010. He was sentenced to 50 years, despite the prosecution asking for 40 years.