Notable litigation filed during June 2023 includes: (1) Bowman v. Unibank; (2) SEC v. Baston; (3) Hafen v. Guyon, et al.; (4) SEC v. Royal Bengal Logistics, et al.; (5) Decimal Capital Partners v. Benavente; and (6) Agri Capital v. Soberal, et al.
Bowman v. Unibank, No. 2:23-cv-00971-JCC (W.D. Wash.)
Ponzi victims filed suit against their financial institution and lender, Unibank in Washington federal court for losses arising from an alleged Ponzi scheme run through an oil and gas technology company, Clean Energy Technology Association, Inc. (“CETA”). The complaint alleges that Unibank provided loans to Plaintiffs to fund their investments into CETA for the purported purchase of the company’s carbon capture and utilization units (“CCUs”). However, the CCUs did not work or generate a profit, and CETA used the money to pay back earlier investors. Plaintiffs seek recovery under theories of RICO participation, violations of state securities and consumer protection laws, fraud, and negligence.
SEC v. Baston, No. 1:23-cv-05347-MKV (S.D.N.Y.)
The SEC filed suit against a schemer in New York federal court for losses arising from an alleged Ponzi scheme run through his purported real estate company, Gordon Management Group (“GMG”). The complaint alleges that GMG represented that investor funds would be used for profitable real estate transactions, but in reality, the funds were being misappropriated for personal gain and to pay earlier investors. The SEC seeks recovery under theories of violations of several provisions of the Securities Act and Securities Exchange Act, permanent injunctive relief against the schemer to prevent him from committing any future federal securities law violations, disgorgement of any ill-gotten gains, and civil penalties.
Hafen v. Guyon, et. al., No. 1:23-cv-00074-DBP (D. Utah)
A court-appointed Receiver filed suit against the Receivership Defendants’ attorney and other fictitious investors in Utah federal court for losses arising from an alleged Ponzi scheme run through the Receivership Defendants’ business. The complaint alleges that while the Receivership Defendants purported to acquire silver to resell it at a profit, they instead used new investor funds to pay earlier investors. The Receiver seeks recovery under theories of voidable or fraudulent transfer and unjust enrichment.
SEC v. Royal Bengal Logistics, et. al, No. 0:23-cv-61179-AHS (S.D. Fla.)
The SEC filed suit against a schemer and his trucking and logistics company, Royal Bengal Logistics, in Florida federal court. The complaint alleges that Defendants targeted Southern Florida’s Haitian-American Community and offered 12.5% to 325% in “guaranteed” returns on investment. While Defendants assured investors that their money was being used to grow the company’s already profitable business, the company was operating at a loss and used new investor funds to pay earlier investors. The SEC seeks recovery under theories of violations of several provisions of the Securities Act and Securities Exchange Act.
Decimal Capital Partners v. Benavente, No. 175388888 (Fla. 11th Cir. Ct.)
Plaintiff investment company filed suit against alleged schemers in Florida state court for losses arising from an alleged Ponzi scheme run through the schemer’s asset management company, Bright Capital Asset Management, LLC (“BCAM”). The complaint alleges that BCAM entered into an asset management agreement with Plaintiff for the purposes of acquiring and managing a $2.9 million residential loan portfolio. However, the schemers stole multiple loans from Plaintiff by preparing fraudulent mortgage assignment agreements and made illegal withdrawals from the operating account. Plaintiff seeks recovery under theories of fraudulent inducement, conversion, and breach of contract.
Agri Capital v. Soberal, et al. (Cal. App. Super. Ct. 2022)
A lender filed suit against alleged schemers in California state court, alleging losses arising from a Ponzi scheme run through the failing tech start-up, Bitwise. The complaint alleges that the schemers solicited a loan from Plaintiff Agri Capital and its affiliated firm CA AG, LLC to repay other creditors so as to protect Bitwise’s Board members from personal liability. In soliciting the loan from Plaintiff, Bitwise allegedly misrepresented its financial health and outstanding liabilities. Plaintiff seeks recovery under theories of common law fraud and negligence, breach of contract, breach of the covenant of good faith and fair dealing, receipt of stolen property under the California Penal Code, and breach of duty of care.