Fraud alert
Daryl Batts and the CFS Ponzi Scheme
Chapman & Associates is completing its investigation into the multi-million dollar ponzi-scheme allegedly masterminded by Daryl Batts, of Easley, South Carolina. Batts pled guilty to securities and mail fraud in the Federal Court in Anderson. Batts was a registered securities representative licensed with a national securities broker-dealer firm. "CFS" was the name of Batts' scheme. "CFS", he would explain to prospective victims, stood for either "College Financial Solutions" or "Comprehensive Finacial Solutions". If you have lost money in the CFS scheme, contact Chapman & Associates to discuss your case with us.
Ed May and Frank Bluestein Accused of Perpetrating $250 Million Fraud
Edward May and Frank Bluestein, both residents of the metro Detroit area, are under investigation by the FBI for allegedly perpetrating a huge pyramid scheme in Michigan and across the country.
Ed May's investment fraud may have victimized as many as 1,200 investors, whose lost savings may have totaled as much as $250 million, according to a complaint filed against him by the Securities and Exchange Commission. Frank Bluestein, an investment broker, allegedly assisted him in perpetrating the fraud by selling the unregistered securities to investors.
Chapman & Associates is preparing to take action against the perpetrators of the E-M Management scheme and those who were supposed to watch them, on behalf of aggrieved investors. Chapman & Associates often represents, on a contingency basis, individuals who have lost their savings in fraudulent investment schemes.
Bryan Behrens Accused of Defrauding Elderly Investors with Pyramid Scheme
Brian Behrens of Omaha, a former investment broker, engaged in securities fraud through his company, National Investments Inc., and collected $6.5 million from about 20 investors, according to a complaint recently filed by the Securities and Exchange Commission.
Behrens allegedly promised his investors, many of them senior citizens, high interest rates that would provide a steady monthly income. The money, however, were not invested in profitable businesses, but were used by Behrens to support his lavish life style, stated the complaint.
Chapman & Associates Filed Claim on Behalf of Victims of SEC-indicted Michael E. Kelly's Universal Lease Fraud
When he finally laid down the chalk and stepped down from his teaching post at the Simi Valley Unified School District, Eric Smith (not his real name-he has asked to remain anonymous) looked forward to a serene and comfortable retirement. In the lawsuit he just filed, the retiree claims his stock broker, David Gin, of Camarillo, destroyed this dream. The complaint alleges that in November, 2003, Gin arranged for the retired schoolteacher to take out a $275,000 home equity loan on his family's Thousand Oaks home and invest in Resort Holdings International (RHI). Gin allegedly told the schoolteacher that RHI "guaranteed" investors safety and a high rate of return. In fact, RHI was a "classic Ponzi scheme," according to the investor's lawyers. The scheme collapsed in April 2005, taking hundreds of senior investors' money with it, and now the 80-year old retired schoolteacher is scrambling to make the monthly payments on his home equity loan, states the complaint.
The schoolteacher has hired Cleveland-based law firm Chapman & Associates to recover the money he says were lost as a result of Gin's bad advice, and has filed a lawsuit to recover his losses. Chapman's investigation revealed that Kelly's agents marketed the fraudulent scheme primarily to senior citizens.
Universal Lease scheme perpetrator Michael E. Kelly was recently indicted by the SEC for allegedly orchestrating a massive securities fraud that bilked investors out of more than $300 million. Kelly paid his selling brokers commissions totaling over $72 millions, according to the SEC indictment.
By using shell companies such as Yucatan Resorts and Resort Holdings, Kelly marketed timeshare interests in Mexico resort hotels, coupled with a pre-arranged rental agreement that guaranteed investors a fixed, high rate of return, claims the SEC. In reality, the money were used to pay earlier investors and fuel Kelly's appetite for luxury goods such as yachts, sports cars and a private plane, according to the SEC. Kelly, the alleged mastermind of the scheme, was arrested on securities fraud charges in December 2006.
The law firm's principal, John Chapman, commented, "this [Universal Lease] is a familiar situation for our firm's lawyers. Once again, elderly investors fell prey to corrupt ‘entrepeneurs' helped by unscrupulous sales agents, while those who were supposed to prevent that were asleep at the wheel." Chapman commented that his firm has already filed several claims on behalf of victimized Universal Lease investors.
Michael Owen Traynor Fraud Currently Being Investigated by John S. Chapman & Associates, LLC
Between 2001-2007 Michael Owen Traynor was an investment broker with Intersecurities. The Florida Department of Law Enforcement alleges that Michael Traynor stole funds from at least 34 of his Manatee, Sarasota and Hillsborough county clients. Traynor misrepresented to his victims that their funds were being invested in Intersecurities, Inc., CGU or Allianz Life Insurance Company. Traynor told the victims their funds were deposited in either a freedom money market account or a freedom bond account that paid a guaranteed interest rate of 8% tax-free annually.
Cleveland Broker David Dadante Charged with Securities Fraud
David Dadante of Gates Mills, Ohio was charged with two counts of securities fraud. It is alleged that from 1999 through November 2005, while serving as president and founder of IPOF Fund, Dadante defrauded 100 different investors of over $46 million by falsely representing that he would invest their money in initial public offerings from Goldman Sachs, Inc. when no such relationship existed. Instead, Dadante used investor money to pay previous investors and also his own personal expenses.
Toledo Broker William Sirls Charged in Investment Scam
Former Wachovia Securities broker, William A. Sirls of Toledo, Ohio was charged with money laundering and mail fraud. It is alleged that Sirls bilked more than 45 people out of $17-45 million. Sirls was the manager of the Wachovia office on West Sylvania Avenue near Talmadge Road in West Toledo. It is further alleged that Sirls fraudulently solicited investments in the purported profit from nonexistent "busted trades" and "builder discounted real estate."
Nevin Gillete Scams Sauk Valley Investors
From 1999 through 2006, Rock Falls, Illinois broker, Nevin Gillette scammed about 40 Sauk Valley investors out of more than $8 million. Gillette sold investors interests in the "GIC Fund." GIC stands for "Guaranteed Investment Contracts." Gillette sold GIC Funds through his company, Executive Marketing Services of Northern Illinois. On August 25, 2006, a Temporary Order of Prohibition was entered by the Illinois Securities Department against Gillette.
Kevin O. Kelley Sentenced to More Than 14 Years
Kevin O. Kelley was sentenced to 170 months in prison for defrauding his senior citizen clients of approximately $4.2 million from 1999 through 2004. In two of the schemes, Kelley claimed to sell investors stock in two private companies, E-Tel, Inc. and AusAm and used them for his personal benefit, including to help support his lavish lifestyle in Greenwich Connecticut. In a third scheme, Kelley sold securities in a partnership called First Venture Leasing. In a fourth scheme, Kelley bought investors stock in a publicly traded company, Coyote Network Systems.
Bullhead, Arizona David Lee McMillan Commits $2.6 million Fraud
From about 1999 through 2005, David Lee McMillan offered and sold various investment contracts including, fictitious first trust deeds, certificates of deposit, variable annuities and project development loans. McMillan told investors that they would receive interest payments. Most of the investors lived in the Bullhead City area and some were long-time friends of McMillan.
SEC Charges Former Linsco Broker Dennis A. Martin with Stealing
The SEC charged an independent contractor registered representative affiliated with Linsco/Private Ledger with stealing as much as $2.4 million from clients. The representative, Dennis A. Martin, 36, of Marietta, Georgia, stole money from as many as 29 clients, including his former father-in-law, after recommending they sell or buy securities, usually variable annuities. As part of his scheme, Martin told clients that within a short period, he would buy new variable annuity contracts with higher principal amounts, which would increase the guaranteed death benefit, according to the SEC. Instead, he forged documents to the variable annuity companies with the contracts and told those companies to mail the proceeds directly to him, according to the SEC.
Martin R. Hershner of Lexington, Ohio Indicted on 118 Counts
Martin R. Hershner was licensed with MML Investors Services from 1999 through 2004. Hershner is charged with crimes involving the misappropriation of approximately $600,000 involving 17 clients, principally from Richland County. Hershner was arrested on October 29, 2005 after two criminal complaints on felony securities counts filed against him in Mansfield Municipal Court.
Ohio Broker Richard A. Daniels Charged with Securities Fraud
Richard A. Daniels promoted and sold securities in the form of promissory notes, through his company, First Capital Group to investors, resulting in an overall investor loss of approximately $2.2 million. During this same time period, Daniels also worked as a securities representative at Lincoln Financial Advisors.
Cease and Desist Order Against Samuel Morocco
From June 17, 2003 through May 4, 2005, Samuel G. Morocco, a licensed salesperson for National Planning Corporation, was selling Joanne C. Schneider Promissory Notes. The Ohio Division of Securities ordered Morocco to cease and desist from this practice in February 2006.
Ohio Broker Gregory Applegate Defrauds 140 Investors
The case of a Main Street broker who allegedly used money for a nonexistent hedge to support his side business will encourage calls for regulatory oversight of the industry.
From 2001 until 2005, Gregory A. Applegate, 46, of Ashland, Ohio, persuaded about 140 investors to give him at least $5.8 million to invest in a hedge fund he claimed was made up of tax-exempt securities, according to the SEC complaint filed Oct. 7.
Bleidt Investors Tell of Promises, Shock
Bradford C. Bleidt, 50, is a West Virginia native with a salesman's charm who now faces federal criminal and civil fraud charges for allegedly running one of the largest pyramid schemes in Massachusetts history. A onetime insurance agent who built a name peddling financial advice to telephone company workers, fraternal organizations, and business owners, Bleidt allegedly robbed his clients of more than $45 million in a trail of deception that fooled his business partners, friends, and regulators.
Kannapolis Woman, Marie Foil, Charged with Felony Securities Fraud
State officials have charged Anne Foil Ballard with felony securities fraud related to her attempts to sell Web Booth Internet kiosks.
USDOJ News Release for Jorge Fernandez
A federal grand jury in Cleveland, Ohio returned an indictment charging Jorge G. Fernandez, age 46, with four counts of wire fraud, and one count of money laundering. The indictment charges that between October 4, 2004, and February 1, 2005, Fernandez devised and executed an artifice to defraud National Planning Corporation customers by fraudulently inducing those customers to liquidate and withdraw funds from variable annuity contracts held through NPC, and to provide the funds to Fernandez for investment in a "new and more favorable" annuity product called "Offshore Wealth Management Group, Inc."
Developers Indicted in 163-Count Securities Fraud Case
Joanne and Alan Schneider were charged in a 163-count grand jury indictment, with charges including the sale of unregistered securities, engaging in a pattern of corrupt activity and theft, announced Cuyahoga County prosecutor Bill Mason. Joanne Schneider is also charged with securities fraud and money laundering. Mason said the Schneiders took at least $60 million from more than 740 investors, most of whom are from northeast Ohio.
25 States Go After Pay-Phone Investment Schemes
More than 13,500 investors have sunk at least $425 million into pay phones on the promise that they would receive 15% interest annually. Regulators have just begun acting on complaints, reported Feb. 28 by USA TODAY, from investors who bought pay phones from companies such as ETS Payphones and Phoenix Telecom in Georgia and Alpha Telecom in Oregon. The U.S. Securities and Exchange Commission, which is also involved, claims that ETS Payphones and Phoenix Telecom were both Ponzi schemes, in which money from new investors was used to pay back old investors. As losses piled up, Charles Edwards, owner of ETS Payphones, spent lavishly.