Ponzi scheme

Corey N. Johnston has pleaded guilty to operating a Ponzi scheme that defrauded at least 17 lenders in Minnesota and several other states. According to the government’s investigation, the lenders suffered losses in excess of $79 million. 

A movie producer from Laguna Niguel, California, has been charged with 89 felony counts – including securities fraud and grand theft – for orchestrating an alleged $9 million Ponzi scheme in which he promised investors up to 35 percent returns for making loans to his B-movie production company. If convicted, Mahmoud Karkehabadi (aka Mike Karkeh) faces more than 25 years in prison.

The federal government has charged Corey N. Johnston with operating a Ponzi scheme that resulted in a total estimated loss of $79.5 million for 17 lenders. Johnston was charged via an Information with one count of bank fraud and one count of filing a false income tax return in connection to this crime. 

A lawyer from Newport Beach, California, Gerald M. Shaw, has pleaded guilty to wire fraud in connection with a high yield investment program that took in millions of dollars from victims who were promised rates of return as high as 40 percent a week. Gregory De Lavalette of San Diego pleaded guilty to wire fraud earlier this year for his role in the scheme. 

Phillip Milton of Palm Beach Gardens, Fla., Gregory Center of McLean, Va., William Center of Richmond, Va., and their company, Trade LLC, based in Palm Spring Gardens, Fla., have been charged by the Commodity Futures Trading Commission with operating a Ponzi scheme involving approximately $28 million in connection with the Trade commodity pool. 

An intermediate appellate court in New York has ruled that plaintiffs adequately alleged claims of aiding and abetting fraud, breach of fiduciary duty, and conversion against a law firm that had drafted the private placement memoranda soliciting investment in the Cobalt Multifamily entities, an alleged Ponzi scheme, whereby the main defendants, convicted criminals — one of whom had been banned from the securities industry by the SEC —

We woke up this weekend to a report that a bank – in this instance, Goldman Sachs – has, for the first time, been held liable for losses suffered in a Ponzi scheme. An arbitrator has ruled that Goldman, which was a lender to the Bayou Group, a hedge fund operated by Samuel Israel III that operated a $250 million fraud, must pay more than $20 million to Bayou’s creditors. 

An investment adviser in Palm Beach Gardens, Florida, and two of its managing members, have been charged with fraud for running a Ponzi scheme and stealing client funds. The SEC alleges that Trade-LLC and its managing members, Philip W.

The Commodity Futures Trading Commission (“CFTC”) has filed an action in federal court in Austin, Texas, charging Richard D. Theye and his company, Micind Capital Management, Inc., with fraud in connection with running a multi-million dollar Ponzi scheme. The CFTC also filed a motion for a statutory restraining order (“SRO”) to freeze the defendants’ assets and prohibit the destruction of books and records.

We’ve previously discussed an alleged $30 million Ponzi scheme by Manhattan business adviser Kenneth Starr, in which Hollywood biggies and other celebrities were among the purported victims. You can search for our prior posts by typing “Starr” in the search box on this page. Today, however, there are reports that the amount of investor claims has significantly jumped. The U.S.