List of Ponzi schemes

This is a list of Ponzi schemes , fraudulent investment operations that pay out returns to investors from money paid in by
subsequent investors, rather than from any actual profit earned.
Contents
1 Historical examples
1.1 19th century
1.1.1 1860s
1.1.2 1890s
1.2 20th century
1.2.1 1910s
1.2.2 1920s
1.2.3 1930s
1.2.4 1980s
1.2.5 1990s
1.3 21st century
1.3.1 2000s
1.3.2 2010s
2 Other notable schemes

Historical examples
19th century
1860s
In her book "The Notorious Mrs. Clem: Murder and Money in the Gilded Age," Wendy Gambler argues that Nancy Clem,
along with Jacob Young and William Abrams ran the first ever Ponzi scheme. [1] [2]
Black Friday (1869) , also referred to as the Gold Panic of 1869 : On September 24, 1869, two speculators, Jay Gould and his
partner James Fisk , attempted to corner the gold market on the New York Gold Exchange by winning the trust and using the
credibility of President Ulysses S. Grant as a means to deceive unsuspecting investors. [3] [4]
1890s
Before Charles Ponzi, in 1899 William "520 Percent" Miller opened for business as the "Franklin Syndicate" in Brooklyn, New
York . Miller promised 10% a week interest and exploited some of the main themes of Ponzi schemes such as customers re-
investing the interest they made. He defrauded buyers out of $1 million and was sentenced to jail for 10 years. After he was
pardoned, he opened a grocery store on Long Island. During the Ponzi investigation, Miller was interviewed by the Boston Post
to compare his scheme to Ponzi's the interviewer found them remarkably similar, but Ponzi's became more famous for taking
in seven times as much money. [5]
20th century
1910s
Towards the end of 1910 a man calling himself Lucien Rivier arrived in Paris and set up a small private bank in the Avenue de
l'Opra , offering to pay investors one per cent per day interest: (his advertisement further defines this as "15 per cent paid twice
monthly"). [6] He soon had so many clients that he was forced to take much larger premises in the Place Boeldieu , opposite the
Opra Comique . Several months later, when the authorities grew suspicious, he fled the country. French police mounted a
large-scale operation to discover both his true identity and his present whereabouts. He was, in fact, Charles Deville Wells ,
who had broken the bank at Monte Carlo some twenty years previously. He was found to have defrauded 6,000 investors out of
approximately two million francs. [7]
1920s
Charles Ponzi became noted in 1920, in Boston, for his supposed arbitrage scheme, which ultimately proved to be merely a
masquerade for paying off early investors with the deposits of later investors. The Ponzi Scheme is named for him. He claimed
he would double investors's money in 90 days through a bizarre plan to buy and resell international postal-reply coupons.
(These, according to the U. S. Postal Service , then operating as the Post Office Department, actually cannot be redeemed for
cash.) Ponzi collected more than $8 million from about 30,000 investors, in just seven months, before the scheme collapsed. [8]
He served fourteen years in prison, [9] was deported from the United States, and spent the rest of his life vainly seeking ways to
restitute the losses of his investors.
1930s
Ivar Kreuger , a Swedish businessman, known as the "match king", built a Ponzi scheme, defrauding investors based on the
supposedly fantastic profitability, and ever expanding nature, of his match monopolies. The scheme soon collapsed in the 1930s,
and Kreuger shot himself. [10] [11]
1980s
In the 1980s, Jean Pierre Van Rossem ran a stock market investment company called "Moneytron" in Belgium . Van Rossem
claimed that he had developed a statistical model to predict the behavior of the stock markets and beat the capitalist system.
Investors believed Van Rossem's claims, and that trust, coupled with his gift for self-promotion, allowed Van Rossem to
accumulate US$ 860 million (about 32 billion Belgian Francs ). He also traded duplicate stocks. In 1991, he was sentenced to
five years in prison for what was in part a Ponzi scheme; according to him, it was "a way to fuck the system". [12] [13]
Between 1970 and 1984 in Portugal , Dona Branca maintained a scheme that paid 10% monthly interest. In 1988, she was
sentenced to 10 years in prison. She always claimed that she was only trying to help the poor, but in her trial it was proven that
she had received the equivalent of 85 million (almost US$120 million). [14] [15]
In January 1984, Adriaan Nieuwoudt started the so-called "Kubus" scheme with an apparent beauty product in South Africa .
Subscribers to the scheme bought a supposedly biological substance called an "activator", that was used to grow cultures in milk.
After growing for a week or two, the cultures were harvested and dried, and sold back to the scheme. The cultures were never
used for a beauty product but were simply ground up and resold to further investors as activators. [16]
1600 investors in Diamond Mortgage Company and A.J. Obie, two firms with the same managers, lost approximately $50
million in what the Michigan Court of Appeals described as "the largest reported 'Ponzi' scheme in the history of the state". It
led to the passage in 1987 of the Mortgage Brokers, Lenders, and Servicers Act. [17] [18]
In the 1980s in San Diego, California , J. David & Company, a purported currency and commodity trading and investing
operation named after its founder, J. David Dominelli, a withdrawn and shy currency and commodity trader, was revealed to be
a Ponzi scheme which took in $200 million and returned $120 million to investors, leaving a net loss of $80 million. The
scheme touched all levels of upper-class business and professional life in San Diego and environs. One of those most closely
involved was Nancy Hoover, the mayor of Del Mar, California , a cozy upscale beach town just north of La Jolla. Hoover was J.
David's assistant and live-in companion at the time. Also involved was the prominent New York law firm Rogers & Wells (now
Clifford Chance ), which had advised J. David (through a rogue partner) and others. [19] [20] [21] [22] [23] When the fall came, J.
David briefly escaped to Montserrat in the Caribbean, but was returned ultimately to plead guilty to federal charges and was
sentenced to 20 years imprisonment, [24] serving 10 before being paroled. [ citation needed ]
Between 1978 and 1983, Ron Rewald ran an investment firm in Hawaii . The firm declared bankruptcy in 1983 and was
revealed to have been a Ponzi scheme which defrauded over 400 investors of more than $22 million. [25] Rewald claimed that
he had been operating the firm as a front for the U.S. Central Intelligence Agency . [26] Rewald was convicted and sentenced to
80 years in prison; he was paroled in 1995. [27]
1990s
was a Russian company that perpetrated one of the world's largest Ponzi schemes of all time. By different estimates from
5 to 40 million people lost up to $10 billion. The company started attracting money from private investors, promising annual
returns of up to 1000%. It is unclear whether a Ponzi scheme was the initial intention, as such extravagant returns might have
been possible during the Russian hyperinflation in such commerce as import-export. [28]
In Romania, between 1991 and 1994, the Caritas scheme run by the "Caritas" company of Cluj-Napoca , owned by Ioan Stoica
promised eight times the money invested in six months. It attracted 400,000 depositors from all over the country who invested
1,257 billion lei (about US$1 billion) before it finally went bankrupt on August 14, 1994, having a debt of US$450 million. The
owner, Ioan Stoica, was sentenced in 1995 by the Cluj Court to a total of seven years in prison for fraud, but he appealed and it
was reduced to two years; then he went on to the Supreme Court of Justice and the sentence was finally reduced to one year and
a half.
Anubhav Teak Plantations scam (India): From 1992 to 1998, a number of teak plantation Ponzi schemes were floated in India,
prominent being Anubhav Plantations . These promised extravagant profits for people who invested in planting teak (done by
purchasing "teak shares"). In 1998, Anubhav plantations collapsed leaving more than 31,000 depositors defrauded to the tune of
Rs. 10712 Crores . [29]
Towers Investors, a bill collection agency, collapsed in 1993; in 1995, chairman Steven Hoffenberg pleaded guilty to bilking
investors out of $475 million. Judge Robert W. Sweet sentenced him to 20 years in prison, plus a $1 million fine and $463
million in restitution. He settled a civil suit with the U.S. Securities and Exchange Commission for $60 million. [30] [31] He
briefly was the owner of the New York Post . At the time the SEC considered the fraud to be "one of the largest Ponzi schemes
in history." [32]
In late 1994, the European Kings Club collapsed, with ensuing losses of about $1.1 billion. This scam was led by Damara
Bertges and Hans Gnther Spachtholz. In the Swiss canton of Uri and Glarus , it was estimated that about one adult in ten
invested into the EKC. The scam involved buying "letters" valued at 1,400 Swiss francs that entitled buyers to receive 12
monthly payments of 200 Swiss francs. The organisation was based in Gelnhausen, Germany. [33]
In early 1996, the United States Securities and Exchange Commission (SEC) filed a civil action against Bennett Funding Group ,
its chief financial officer, Patrick R. Bennett, and other companies Bennett controlled, in connection with a massive Ponzi
scheme. The companies fraudulently raised hundreds of millions of dollars, purportedly to purchase assignments of equipment
leases and promissory notes. [34]
From 1993 until 1997, a church named Greater Ministries International in Tampa, Florida , headed by Gerald Payne bilked over
18,000 people out of $500 million. [35] Payne and other church elders promised the church members double their money back,
citing Biblical scripture. However, nearly all the money was lost or hidden away. Church leaders received prison sentences
ranging from 13 to 27 years.
In the mid-1990s, Albania was transitioning into a liberalized market economy after years under a State-controlled economy
reinforced by the cult of personality involving longtime Communist leader Enver Hoxha ; the rudimentary financial system
became dominated by pyramid schemes, and government officials tacitly endorsed a series of pyramid investment funds. Many
Albanians, approximately two-thirds of the population, invested in them. In 1997 , Albanians, who had lost $1.2 billion, took
their protest to the streets where uncontainable rioting and attacks on government infrastructure led to the toppling of the
government and the temporary existence of a stateless society. Although technically a Ponzi Scheme, the Albanian scams were
commonly referred to as pyramid schemes both popularly and by the International Monetary Fund . [36]
In 1996, Sidney Schwartz and his son, Stuart F. Schwartz, pleaded guilty to charges of running a multimillion-dollar Ponzi
scheme that targeted members of a Long Island, New York, country club at which the senior Schwartz was a member of the
board of governors. [37]
In 1997, South African businessman Kenny Kunene was convicted of running a Ponzi scheme with over 2,000 investors and
sentenced to six years in prison. [38]
In Delhi, India , Hoffland Finance collapsed amid a major scandal in 1998. Hoffland, a category II merchant banker, had been
suspended by SEBI, which directed it to refrain from undertaking any new portfolio management assignments. It had floated a
scheme, called "Invest Card", that lured investors with a return of 27% annually. [39]
21st century
2000s
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 co-ops were openly advertising in radio and TV ads using Haitian pop stars as spokespeople. It is estimated that more than
$240 million was swindled from investors, equivalent to 60% of the country's government budget. [40]
The Brothers was a large investment operation in Costa Rica , from the late 1980s until 2002, eventually exposed as a Ponzi
scheme. 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, while Luis Enrique Villalobos remains a fugitive.
[41]
In 2003, the SEC shut down 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 viatical settlements to HIV patients. Lombardi is now serving a 20-
year prison sentence. [42]
In 2004, the SEC fined Raymond James $6.9 million for failure to supervise former broker Dennis Herula, who was accused of
participating with others in a Ponzi scheme that raised about $44.5 million from investors in 19992000. Herula himself raised
about $16.5 million of investor funds, most of which was later transferred to his wife's brokerage account at Raymond James;
he was arrested in Bermuda and extradited to the United States where he pleaded guilty to fraud and was sentenced to 15 years
and eight months imprisonment. [43]
In February 2005, Moshe Leichner and his son Zvi [44] were sentenced to 20 years in federal prison for running a Ponzi scheme
[45] [46] that defrauded hundreds of investors out of more than $95 million, [47] of GunnAllen Financial [48] (shut down by
regulators in March 2010 for fraud allegations and losses related to another Ponzi scheme [49] ) and Safe Harbor Capital
Management (now dba HarborLight Capital Management) [50] which lost $40 million [51] for their investors.
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 period. He operated under the name Financial Advisory Consultants from Lake Forest, California . [52]
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 City and incorporated in the Commonwealth of Dominica . [53] [54] [55]
In October 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. On
September 19, 2008, Nathan was sentenced to seven years imprisonment including with a non-parole period of five years. [56]
In 2007, a million Chinese lost over $1.2 billion in a scheme involving ant farming. [57]
On April 13, 2007 Sibtul Shah was arrested for Ponzi scheme that promised to double the initial investment in 15, later
extended to 70, days.
On June 27, 2007, former boy band mogul Lou Pearlman was indicted by a grand jury on several counts of fraud and money
laundering which for running a $500 million Ponzi scheme over 20 years; he pleaded guilty and was sentenced to 25 years
imprisonment. [58]
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;, 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). [59]
On March 7, 2008, WinCapita Oy's Internet site was shut down, due to investigation of the company. This, the so-called biggest
pyramid-scheme in Finland was put up by Hannu Kailajrvi and his partner Tiina Wartti. They marketed the company by saying
that the company is a successful currency exchange firm and that people can join the club only by invitation. They also
marketed the idea for investors by promising net profits of over 400%. In 2013, the court of appeal for Helsinki sentenced
Kailajrvi to prison for 5 years and Wartti for one year and 3 months to conditional discharge.
On May 2, 2008, it was reported that John G. Ervin of Safevest LLC had been arrested by the FBI on suspicion of running a
Ponzi scheme that collected $25.7 million, mostly from Christian investors, partly recruited through Ervin's business partner
Pastor John Slye and members of his church. Specifically, according to newspaper The Orange County Register , "the company
recruited church members to sell the investment to other church members." [60] Slye had run a cancer research charity, which
gave investors confidence. The scheme ran from May 2007 but started to run out of funds by October as investors asked for
their money back. Safevest LLC returned $18 million to investors, the rest having been split among five main expenditures,
including the two business partners' families, the purchase of a $1 million golf course, and $950,000 for GTS Research Inc. The
latter, run by Carl LaRue Godfrey who was previously convicted for "illegal business practices and various other crimes", [61]
was served a Desist and Refrain order by the State of California in August 2007, [61] the year of the Safevest scheme. GTS
Research had claimed to have a patent pending for a new energy source. [61] The fifth portion, $510,000, was paid to Dennis D.
Cope, who had a criminal conviction in relation to a previous Ponzi scheme. Ervin himself had been sued in 2003 for running a
separate $7.7 million Ponzi scheme, a fact that could be discovered through an internet search. [60]
In the third and the biggest Philippine Ponzi scam (involving $150 million and $250 million), criminal charges, based on suit
filed by 21,000 complainants were filed in 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. [62]
On August 1, 2008, the WexTrust Investment firm was shut down by the SEC, charging that WexTrust and two of its owners
(Joseph Shereshevsky of Norfolk, Virginia and Steven Byers of Oak Brook, Illinois) operated a Ponzi-type scheme by
promising unusually high returns to earlier investors and paying them with money raised from later investors. The SEC case,
filed in federal court in Manhattan, New York, alleged that WexTrust and the two men defrauded investors by diverting at least
$100 million to unauthorized uses. WexTrust targeted the Orthodox Jewish community, particularly in Norfolk, VA and New
York City. The receiver, Timothy Coleman, has returned only 2% of principal to WexTrust investors. [63] Shereshevsky and
Byers pleaded guilty to securities fraud, mail fraud and conspiracy, and were sentenced to 21 years and 10 months and 13 years
and four months imprisonment respectively, in addition to being ordered to make restitution and disgorge their gains. [64]
Business Consulting International was a London-based investment company, that collapsed after being exposed by a City of
London Police investigation in 2008 as the United Kingdom's biggest ponzi scheme, estimated at 115M. The business was set
up and run by London-based Indian businessman Kautilya Nandan Pruthi, in partnership with Kenneth Peacock and John
Anderson.
On December 1, 2008, in Saint Cloud, Minnesota, celebrity businessman 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. 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 pleaded 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. [65] 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. [ citation needed ]
On December 10, 2008, Bernard Madoff told 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. [66] As of December 2008 the losses were estimated to be $65
billion, making it the largest investor fraud in history. [67] Madoff was sentenced to 150 years in prison on June 29, 2009.
On January 9, 2009, the SEC charged Joseph S. Forte from Broomall, Pennsylvania 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 personal purposes, over $28 million. [68] He was sentenced to 15 years imprisonment.
[ citation needed ]
On January 16, 2009, the United Kingdom Serious Fraud Office 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 out of 25,000
each in return for a promise of a house in the North East of England. All five directors John Potts, Peter Gosling, Natalie
Laverick, Peter Graham, and Eric Armstrong pleaded guilty to fraud and were sentenced in March 2009. [69]
On January 26, 2009, Nicholas Cosmo , founder of Agape World, surrendered to federal authorities in connection with a
suspected $380 million Ponzi scheme. Previously convicted of fraud in 1999, Cosmo surrendered at the Long Island Railroad
train station in Hicksville, N.Y. and was sentenced to 50 years imprisonment. [70] 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. [71]
On February 9, 2009, the City of London Police Economic Crime Department arrested Terry Freeman, director of GFX Capital
Markets Ltd, over a 40 million fraud which is possibly a Ponzi scheme. [72]
On February 17, 2009, the Stanford International Bank and proprietor Allen Stanford were accused of "massive fraud" by U.S.
authorities, and SIB's assets were frozen. The apparent Ponzi scheme drew in more than $8 billion of "deposits" to Sir Allen's
bank in Antigua, many from investors in Latin America. He was arrested by the Federal Bureau of Investigation on June 14,
2009, and sentenced to 110 years imprisonment on June 14, 2012. [73]
On February 25, 2009, the SEC charged James Nicholson for allegedly "defraud[ing] hundreds of investors of millions of
dollars" [74]
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. [75] [ dead link ] On appeal she was sentenced
to 10 years. [ citation needed ]
On June 17, 2009, Donald Anthony Walker Young (also known as Tony Young or Walker Young), had his office seized for
using money from new investors to pay previous investors and using some of the money to purchase a vacation home in Palm
Beach, Florida. 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; [76] pleaded guilty in July 2010, to
mail fraud and money laundering and was sentenced to 17-and-a-half years in prison in May 2011. [77]
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. [78] On April 27, 2010, Brooks pleaded guilty
to two felony counts of securities fraud.and two counts of making an untrue statement. He was sentenced to eight years in
prison for each of the four counts, to run cumulatively for a total sentence of 32 years, and was also ordered to pay more than
$5.1 million in restitution to his victims. [79]
On June 12, 2009, investors were reported to have lost billions of South African Rands in a Ponzi scheme masterminded by
Barry Tannenbaum . [80]
On November 16, 2009, the SEC charged four individuals and two companies for perpetrating a Ponzi scheme to defraud over
300 investors of $30 million. Pennsylvania-based Mantria Corporation , run by executives Troy Wragg and Amanda Knorr,
supposedly focused on green initiatives such as a "carbon negative" housing community in Tennessee and an organic waste-
derived "biochar" charcoal substitute production plant. Between September 2007 through November 2009, Mantria Corporation
raised funds through Denver-based Speed of Wealth LLC, run by Wayde and Donna McKelvy. The SEC alleged that Mantria
and Speed of Wealth exaggerated the scope and success of Mantria's operations. Subsequent charges estimate Mantria and
Speed of Wealth raised $54 million, of which they paid $17.5 million to investors, using investors' own funds to pay those
returns. [81] [82] [83] [84]
December 1, 2009: Scott W. Rothstein , a disbarred lawyer and the former managing shareholder, chairman, and chief executive
officer of the now-defunct Rothstein Rosenfeldt Adler law firm was accused of funding his philanthropy, political contributions,
law firm salaries, and an extravagant lifestyle with a massive $1.4 billion 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). [85] 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. [86] 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. [87]
2010s
In 2010, Trevor Cook of Minnesota plead guilty and began serving a 25-year federal prison sentence in connection with the
Oxford Group which reportedly took in $194 million. Bo Beckman still has charges pending in connection with the scheme. [88]
[89] [90] [91]
In early 2010, Tzvi Erez from Toronto, Canada scammed 76 creditors out of a combined $27 million. He created an illegitimate
print business called E Graphix and convinced investors to give him large loans in order to carry out fictional printing orders.
He was charged with fraud and forgery by Toronto police, but was not convicted because the Canadian courts lacked adequate
trial time to give him a trial. [92] [93]
On May 20, 2010, the SEC filed a federal case against Edward A. Allen and David L. Olson, two former brokers of World
Financial Group / World Group Securities , accusing them of having raised approximately $14.8 million through the offer and
sale of promissory notes as part of an illegal Ponzi scheme in the States of Ohio and Florida between September 2005 and
December 2008. [94]
On June 15, 2010, the United States Securities and Exchange commission filed an enforcement action against Matt Jennings
and his cohorts and accused them of running a Ponzi Scheme wherein they stole over $53 million from investors. [95] On
December 12, 2012, the court appointed receiver for Westmore entities filed an action against Robert Jennings [96] for return of
investor funds. [97]
In December 2011, film exhibitor Norman Adie pleaded guilty in U.S. Federal Court to running a Ponzi scheme in New York
and Pennsylvania. [98]
On August 17, 2012, the SEC filed a federal case against defendants Paul Burks and Zeek Rewards, based out of North
Carolina . Paul Burks ran the entity of Zeek Rewards, a fraudulent investment opportunity that promised investors returns as
high as 1.5% per day by sharing in the profits of Zeekler, a penny auction. Investors were encouraged to recruit new members to
increase their returns. New investors had to pay a monthly "subscription" of up to $99/month and an initial investment of up to
$10,000. The higher the initial investment, the higher the returns appeared. The Zeekler entity was an online penny auction that
served as a front for the Zeek Rewards entity. Investors in the Zeek Rewards scheme were promised payouts from the profits
made on Zeekler by recruiting new members and giving out "bids" that customers would use on the penny auction. While the
Zeekler website did bring in revenue, it was only about 1% of what investors believed was being brought into the Zeek Rewards
company. The vast majority of dispersed funds were paid out from newly recruited investors. It is believed that the ponzi
scheme was a $600M enterprise and the number of affected investors was 1 million when the SEC filed suit. This made Zeek
Rewards the largest ponzi scheme in history by number of affected investors, even though numerous other ponzi schemes have
had larger enterprise values. Paul Burks paid $4M to the SEC and agreed to cooperate. It remains unknown how much, if any,
of the funds lost in the scheme will be returned to affected investors, as of August 2012. [99] [100] [101]
In August 2012, Trendon T. Shavers (aka Pirate and pirateat40), the founder and operator of "Bitcoin Savings and Trust"
(BTCST), [102] a non existent company advertised over an internet forum, disappeared from the public scene. Shavers raised at
least 700,000 Bitcoin in BTCST investments by running it as a Ponzi scheme. The fact that BTCST was run using Bitcoin ,
makes this a unique instance of a Ponzi scheme. It allowed Shavers to initially stay completely anonymous, making it possible
for him to just disappear with the money from his investors. Although some called it a pyramid scheme , BTCST is generally
considered a Ponzi scheme. At the time he disappeared, somewhere around August 31, the 700,000 BTC were valued at around
US$4,500,000. However, since Bitcoin prices increased significantly since the time it happened, they could now be worth more
than US$500 million. The SEC has charged Shavers with fraud. [102]
On September 5, 2012, the Economic Offences Wing of the Tamil Nadu Police arrested M S Guru, the mastermind of a
'contract emu farming' scheme for financial fraud and cheating over 12,000 investors. The filed cases alone amount to over $28
million. [103]
On October 1, 2012, a joint raiding operation was conducted on Genneva Malaysia Sdn Bhd and its affiliates by the Royal
Malaysian Police, Ministry of Domestic Trade, Cooperatives and Consumerism, Companies Commission of Malaysia, and
Bank Negara Malaysia. Singapore's Commercial Affairs Department has also conducted a similar operation against Genneva
Pte. Ltd. in Singapore. Estimation of RM10 billion (close to US$330 million) filed cases. [104]
In April 2013, in Israel , Eran Mizrahi was convicted for multiple counts of fraud and money laundering and sentenced to 12
years [105] [106] [107] in a scheme which promised and investment in foreign-currency via Swiss banks, but in which outflows
were paid from existing investor's funds which were also funneled to Mizrahi and his family. [ citation needed ]
In June 2013, in Tunisia , a fraud investment network collapsed when the master of a Ponzi scheme, Adel Dridi, tried to flee the
country following government investigation with more than 80 million Tunisian dinars that he stole from around 50 thousand
investors, many of whom claimed that they sold their possessions to enjoy the interests of Yosr development. Adel Dridi was
arrested the day after he ran, and he is now being prosecuted. The company "Yosr Developpement Ltd" director was behind
money laundry, illegal investments and Ponzi scheme frauds. [108]
On February 26, 2014, Gregory Loles, who formerly ran Farnbacher-Loles and related investment entities was sentenced to 25
years imprisonment by federal judge Alvin W. Thompson for a $25 million ponzi scheme resulting in several million dollars in
losses. [109]
In June 2014, the Securities Exchange Commission alleged that Tom Abraham and Kenneth Grant their company KGTA
Petroleum, Ltd., stockbrokers Jeffrey Gainer and Jerry Cicolani, and others orchestrated and/or helped promote a Ponzi scheme
related to KGTA, a petroleum company that purported to earn profits by buying and reselling crude oil and refined fuel products.
Grant and Abdallah were accused of having operated KGTA as a Ponzi scheme. The oil purchase orders never existed and
KGTA did not sell fuel or oil to its purported buyers, according to the complaint. In classic Ponzi scheme fashion, KGTA
allegedly used some of the funds raised from new investors to pay fake returns to earlier investors. The two men raised at least
$20.73 million between October 8, 2012, and February of this year. [110] In October of 2016, Grant, Abdallah, Jerry Cicolani,
Jeffrey Gainer, Mark George, and Kelly Hood were sentenced to prison. [111]
In September 2014, the Securities Exchange Commission conducted an emergency asset freeze and filed civil fraud alleging
that California-based company, Nationwide Automated Systems, Inc. (NASI), was operating a $123 million ATM ponzi scheme.
[112] [113]
In October 2015, in Israel , Amir Bramly 's Kela fund which offered fixed-interest investments supposedly for a low-risk
"Capital Completion" strategy, went into liquidation proceedings before the Tel-Aviv district court after not meeting client
outflow demands. [114] During the proceedings, more than 300 million NIS of unfulfilled debt, mostly from investors, were set
before the court. In addition, the court appointed liquidator produced a report claiming that funds in the Kela fund were not
actually used for "Capital completion", but rather funneled into Rubicon Business Group, and that in addition that funds were
moved from Rubicon to Bramly and his family, due to which a court order prohibiting disposition of assets was placed on
Bramly and members of his family. [115] As a result, the Kela fund, Rubicon Business Group, and a number of held companies
were placed in permanent liquidation by the Tel-Aviv district court in January 2016 [116] after the court determined that funds
were inter-meshed between the companies, and that debts, mainly to investors, exceeded assets. In June 2016 Bramly was
indicted for theft, fraud and laundering of more than 400 million NIS, [117] [118] and Kela's investment recruiter Sivan Zibulski ,
as part of a plea bargain in which she will serve as a prosecutor's witness, was convicted and sentenced in January 2017. [119]
In June 2013, Brazilian Justice first blocked Telexfree Brazilian operations, [120] [121] and in September 2015, convicted the
company for operating a Ponzi Scheme. [122] [123] Telexfree operations in US were shut down by SEC April 2014. [124] [125] In
October 2016, Telexfree co-owner James Merrill pleaded guilty. [126] [127] Telexfree was a multibillion-dollar Ponzi scheme
desguised as an internet phone service company. Prosecutors have described it as the largest fraud of all time in terms of the
number of people affected - more than 1 million, with victims in various countries. [126]
In July 2016 the SEC obtained a Temporary Restraining Order against Traffic Monsoon LLC and its owner Charles Scoville,
accusing him of operating a Ponzi Scheme and four counts of Fraud [128]
The ~$30 billion Ethereum cryptocurrency Initial coin offering was referred to as the first "smart ponzi" by the Financial Times
' Alphaville blog and as a ponzi scheme by the Atlantic Monthly in May-June, 2017. [129] [130]

Other notable schemes

Other notable (but involving smaller amounts of money) Ponzi schemes include:
In 1880, Sarah Howe opened up a "Ladies Deposit" in Boston promising eight percent interest, although she had no method of
making profits. This unique scheme was billed as "for women only". Howe was arrested on October 18, 1880, by New York
City Police and sentenced to three years in prison. [5]
On March 22, 2000, four people were indicted in the Northern District of Ohio, on charges including conspiracy to commit and
committing mail and wire fraud. A company with which the defendants were affiliated allegedly collected more than $26
million from "investors" without selling any product or service, and paid older investors with the proceeds of the money
collected from the newer investors. [131]
In late 2003, a scheme by Bill Hickman, Sr., and his son, Bill Jr., was shut down. He had been selling unregistered securities
that promised yields of up to 20 percent; more than $8 million was defrauded from dozens of residents of Pottawatomie County ,
Oklahoma , along with investors from as far away as California . [132] [ dead link ] Hickman Sr. was sentenced to 8 years in state
prison and Hickman Jr. to five years.
In December 2004, Mark Drucker pleaded guilty to a Ponzi scheme in which he told investors that he would use their funds to
buy and sell securities through a brokerage account. He claimed that he was making significant profits on his day trades and that
he had opportunities to invest in select IPOs that were likely to turn a substantial profit in a short period of time, and promised
guaranteed returns of up to fifty (50%) percent in 90 days or less. In less than two years of trading, Drucker actually lost more
than $850,000 in day trading and had no special access to IPOs. He paid out more than $3.6 million to investors while taking in
$6.3 million. [133] [134]
In June 2005, in Los Angeles, California, John C. Jeffers was sentenced to 14 years in federal prison and ordered to pay $26
million in restitution to more than 80 victims. Jeffers and his confederate John Minderhout ran what they said was a high-yield
investment program they called the "Short Term Financing Transaction". The funds were collected from investors around the
world from 1996 through 2000. Some investors were told that proceeds would be used to finance humanitarian projects around
the globe, such as low-cost housing for the poor in developing nations. Jeffers sent letters to some victims that falsely claimed
the program had been licensed by the Federal Reserve and the program had a relationship with the International Monetary Fund
and the United States Treasury . Jeffers and Minderhout promised investors profits of up to 4,000 percent. Most of the money
collected in the scheme went to Jeffers to pay commissions to salespeople, to make payments to investors to keep the scheme
going, and to pay his own personal expenses. [135]
In February 2006, Edmundo Rubi pleaded guilty to bilking hundreds of middle and low-income investors out of more than $24
million between 1999 and 2001, when he fled the U.S. after becoming aware that he was under suspicion. The investors in the
scheme, called "Knight Express", were told that their funds would be used to purchase and resell Federal Reserve notes, and
were promised a six percent monthly return. Most of those bilked were part of the Filipino community in San Diego. [136]
On May 10, 2006, Spanish police arrested nine people associated with Forum Filatelico and Afinsa Bienes Tangibles in an
apparent Ponzi scheme that affected 250,000 investors from 1998 to 2001. Investors were promised huge returns from
investments in a stamp fund. [137]
In May 2006, U.S. Securities and Exchange Commission shut down Universo Foneclub , designed and owned by Sanderley
Rodrigues de Vasconcelos (aka Sann Rodrigues). [138] [139] It was registered in the US and targeted the Brazilian community.
Approximately 1500 people invested more than $3 million.
On September 15, 2010, Nevin Shapiro pleaded guilty to a 20052009 Ponzi scheme in a Newark, New Jersey court. The
scheme brought in approximately $880 million. Headquartered in Miami, the scheme was based on an import/export grocery
business but was diverting investments to attract new investors. Among the items seized as a result of his plea were a $5 million
Miami mansion and a yacht. He was known as "Lil Luke" because of his relationship with the Miami Hurricanes football team.
This was a tribute to Luther Campbell , a famous former Hurricanes booster. On August 16, 2011, in a story broken by Yahoo!
Sports , Shapiro stated that his support of the team included cash, entertainment, prostitutes , and gifts, all against NCAA rules.
For more details on Shapiro's involvement with the Miami program, see 2011 University of Miami athletics scandal . [143] [144]
[145]
On January 27, 2017, the Securities and Exchanges Commission filed charges against Joseph Meli and Matthew Harriton,
saying they defrauded more than $97 million from 138 investors. The SEC alleged that the men promised double-digit returns
re-selling high priced tickets to popular Broadway musicals such as Hamilton .