Ponzi Scheme

The Frankowski Firm is investigating potential claims against Aequitas Capital Management of Lake Oswego, Oregon. The Securities and Exchange Commission has brought charges against Aequitas and three of its top executives for allegedly running a $350 million Ponzi scheme. The SEC allegations claim that, since 2014, Aequitas defrauded investors into thinking they were investing in a portfolio of investments in the healthcare, education, transportation, or consumer credit sectors. In reality, however, the vast majority of investor funds were used to pay Aequitas’ redemptions and interest to prior investors and pay for lucrative salaries, a private jet and pilots, and expensive dinner and golf outings for prospective investors. The scheme began to implode in May 2014 when Corinthian Colleges, a for-profit education provider, defaulted on obligations to an Aequitas-owned LLC, resulting in significant cash flow shortages for the firm. Rather than reduce their expenses or increase operating income, Aequitas used investor funds to try to keep their insolvent company afloat. By [...]

Did you lose money investing with the Woodbridge Group? The Frankowski Firm can help The Securities and Exchange Commission (“SEC”) announced yesterday that it was bringing charges and freezing the assets of a group of unregistered funds and their owner based on allegations that the Woodbridge Group and its founder, Robert Shapiro, bilked investors (many of them seniors) in a massive $1.2 billion Ponzi scheme. According to the allegations, Woodbridge and Shapiro defrauded more than 8,400 investors in unregistered Woodbridge funds, based on a business model built on lies. According to the SEC complaint, Woodbridge marketed itself as issuing loans to purported third-party commercial property owners that were paying Woodbridge between eleven and fifteen percent annual interest for “hard money,” short-term financing. Woodbridge then promised to pay investors five to ten percent interest annually, according to the allegations. The claimed high-interest loans to third parties, were actually in large part made to Shapiro-owned companies that had no income and never made [...]

How much would you be willing to pay for a ticket to see Hamilton? What about seeing Adele live in concert? Sports radio talk show host Craig Carton preyed on the popularity and exclusivity of these types of events, parlaying his perceived ability to purchase the tickets into a Ponzi scheme of more than $5 million. The basic premise of any Ponzi scheme is that any “profit” created from the solicitation of new investors or buy-in is used to repay earlier investors, or line the pockets of the originator, rather than reinvested or properly disbursed to all investors equitably. In the case of Craig Carton, the well-known New York sports talk radio host, proceeds from fictitious concert ticket investments were funneled into repaying his own substantial gambling debts. Relying on the public’s misconception that a high profile radio employee would have access to high-demand concert tickets , and belief in Carton’s salesmanship via his radio broadcast, Carton, along with two [...]

The Frankowski Firm is investigating potential claims against stockbroker Mark David Holt, formerly of Harbour Investments and Geneos Wealth Management in the Minneapolis-St. Paul, Minnesota area. Mr. Holt is a disbarred attorney and former broker who was banned from the securities industry and is currently serving a ten-year prison sentence for wire fraud. According to Financial Industry Regulatory Authority (“FINRA”) data, Mr. Holt was barred from the securities industry after pleading guilty in 2014 to a wire fraud violation. The allegations stem from Mr. Holt’s theft of his clients’ money by depositing more than $4 million of their investment funds into his personal account. Mr. Holt represented to his customers that he was investing their money in bond funds and mutual funds but was instead depositing it into his personal account to fund a lavish lifestyle, including a yacht club membership, luxury cars, Ritz Carlton hotel stays, fancy dinners, horse boarding, and exotic dancers, according to this article from the [...]