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Ponzi Scheme

Banks and Brokerage firms can be liable for aiding and abetting ponzi schemes

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By Scott L. Starr Ponzi schemers rarely have the ability to carry out their nefarious conduct alone; instead, they need the assistance of brokers and banks to handle a variety of financial transactions.  Under some circumstances, these banks and brokerage firms may ultimately be found liable for aiding and abetting the Ponzi scheme. By way of example, Starr Austen & Miller a few years back represented a large group of Ohio investors who had invested in excess of $30 million with a local insurance salesman who was operating a Ponzi scheme. The Ponzi schemer ran all of the transactions through his brokerage...

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Lowell, Indiana man strikes plea deal in ponzi-like investment scheme, records show

A Lowell, Indiana, man accused of bilking more than 25 people out of millions in a crooked investment scheme has entered a guilty plea in U.S. District Court, to avoid taking the case to trial, records show.

By Lauren Cross of NWItimes.com A Lowell, Indiana, man accused of bilking more than 25 people out of millions in a crooked investment scheme has entered a guilty plea in U.S. District Court, to avoid taking the case to trial, records show. Richard E. Gearhart, 69, faces up to five years in prison, three years of supervised release and a $250,000 fine, records show. If the agreement is accepted by a judge, he will also be ordered to pay restitution to his victims, though the final amount has yet to be determined. Records do not indicate if his co-defendant, George R. McKown, 66, of...

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Amish businessman ordered to pay $5.2M in scam targeting his own community

Amish businessman ordered to pay $5.2M in scam targeting his own community

By James Leggate of FOXBusiness.com A man who authorities said took advantage of his Amish heritage to recruit novice investors into a fraudulent scheme has been ordered to pay $5.2 million, most of it to his clients. Indiana resident Earl Miller’s 72 investors lost more than $4.1 million when his investments failed, according to a complaint from the Securities and Exchange Commission in 2015. He had encouraged people to put their retirement savings into his fund, which he had no experience in managing, by advertising “double digit annual returns” and promising a fixed-rate return of 8 percent to 12 percent per year,...

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NWI tied to medical-device kickback scheme, federal lawsuit states

A surgeon with ties to Northwest Indiana received millions of dollars from a medical-device company accused by the federal government of paying off doctors to use its products, a recently filed federal whistleblower lawsuit reveals.

By Giles Bruce of The Northwest Indiana Times A surgeon with ties to Northwest Indiana received millions of dollars from a medical-device company accused by the federal government of paying off doctors to use its products, a recently filed federal whistleblower lawsuit reveals. An Indiana surgeon identified in the civil complaint only as "Dr. A" — and who performed surgeries in Hobart, Merrillville and Munster — generated "by far" more revenue for Huntley, Illinois-based Life Spine than any other physician, including more than $22.9 million overall and roughly a quarter of sales in 2016 and 2017 alone, the lawsuit alleges. The second...

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Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

Investors say ex-‘Fox & Friends’ host turned them into unwitting slumlords

By: Tim Evans and Tony Cook, Indianapolis Star In court filings and responses to online complaints, Morris contends he merely referred investors to Oceanpointe and several related entities. Investors' anger and lawsuits are misplaced, Morris said. “Clayton Morris and Morris Invest identify with the many investors who lost money through home-renovation, property-management, and other failures by Oceanpointe and its various corporate entities and employees," Hensel said in the emailed statement. "Clayton Morris and his family purchased properties and were similarly damaged by Oceanpointe’s misconduct. The Morris family and Morris Invest have lost hundreds of thousands of dollars. Clayton and Morris Invest deny all allegations...

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How a Chicago rabbi allegedly abused his trust with the Chicago Jewish community

An article authored by Law360’s David Matthews describes how a Chicago rabbi allegedly abused his trust with the Chicago Jewish community by convincing his followers to invest over $35 million into a Ponzi scheme.

An article authored by Law360’s David Matthews describes how a Chicago rabbi allegedly abused his trust with the Chicago Jewish community by convincing his followers to invest over $35 million into a Ponzi scheme. The facts as described by the following article contain the hallmarks of a typical Ponzi scheme.  These are: A person in a position of trust, such an accountant, cleric, preacher, insurance salesman, or an investment advisor; Abusing his trust by convincing his followers to invest their hard earned retirement savings; By promising big returns with little or no risk; The Ponzi schemer steals a portion of...

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Northern Ohio Ponzi scheme involved convicted fraudster Tim Durham

"Failing Calif. Leasing Co. An $80M Ponzi Scheme, SEC Says", an article from Law 360 detailing yet another huge Ponzi scheme, this one occurring in California.  You will see from the article that is alleged by the Securities and Exchange Commission that Ralph Iannelli, the president and founder of Essex Capital Corp., raised approximately 80 million dollars from investors in return for promissory notes, while falsely portraying his business as successful. The Essex Capital Corp. business purportedly was engaged in leasing assets to businesses, and then reporting back to their investors that they were very successful, instead of accurately reporting...

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Yet Another Classic Ponzi Scheme

Yet Another Classic Ponzi Scheme

By Scott Starr An article that recently appeared on Law360.com, authored by Dean Seal, titled "Tenn. Tractor Supplier Gets 3 Years For $43M Ponzi Scheme" which describes another classic Ponzi scheme in a small Tennessee town of approximately 5,000 residents, Sparta, Tennessee. The Ponzi schemer scammed his friends, relatives, and fellow citizens out of $43 million. I would recommend that you read this short article carefully as it represents the classic hallmarks of a Ponzi scheme. Starr Austen & Miller has represented hundreds of victims of Ponzi schemers, just like the scam described in the article. Ponzi schemers always follow the same...

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Stock Fraudsters Prey on the Retired

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Starr Austen & Miller has represented over 1,400 investors who have lost their hard earned savings to bad brokers and investment fraud.  Almost always the victim is an elderly person or someone nearing retirement who is defrauded of all or nearly all of their retirement savings. The article, " Pa. Broker Gets 5 Years for $2M Ponzi Scheme" from Law360.com, an article authored by Hayley Fowler, summarizes a similar case. Bad stock brokers and bad investment advisors will quote high returns while touting the “safety” of the investment they are pushing.  This pitch is especially attractive to retired folks who are worried...

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Judge orders ex-CEO to pay nearly $850K in Veros Ponzi scheme

Judge orders ex-CEO to pay nearly $850K in Veros Ponzi scheme

By Dave Stafford / The Indiana Lawyer A former finance company chief with a history of securities law violations has been ordered to pay almost $850,000 in connection with the sale of securities based on farm loans. Former Pin Financial LLC chief executive Tobin Senefeld of Indianapolis was ordered Tuesday to pay a total of $843,356 in a lawsuit the Securities and Exchange Commission filed against him, his firm and Veros Farm Loan Holding LLC. The SEC said defendants violated securities laws in a Ponzi scheme. Rather than funding current farming operations, as investors were told, proceeds of the securities were used to cover farms’...

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