Notable litigation filed during May 2024 includes: (1) Courtney v. Sawyer, et al., No. 24-cv-37962 (Cal. Super. Ct.); (2) two related actions by a court-appointed receiver, captioned Dottore v. FTF Lending, LLC, et al., No. CV-2024-05-1878 (Ohio Ct. Comm. Pl.); Dottore v. MHS Investors LLC, No. CV-2024-05-1904 (Ohio Ct. Comm. Pl.); and (3) two separate actions targeting the same alleged scheme, captioned MJT Water Technology, LLC v. First Fed Bank, et al., No. 8:24-cv-01002 (S.D. Cal.); Alkaline Water Holdings, LLC v. Wear, et al., No. 2:24-cv-01890 (E.D. Pa.).

Courtney v. Sawyer, et al., No. 24-cv-37962 (Cal. Super. Ct.)

Victims of an alleged Ponzi scheme filed suit in California state court against defendant schemers who purported to offer investments in short-term promissory notes used to fund high-interest bridge loans to third-party borrowers. The complaint alleges that plaintiffs were induced to continuously “roll” their principal into new investment positions for several years and when they eventually attempted to redeem their funds, defendants delayed with excuses and have yet to repay plaintiffs’ initial investment funds. Accordingly, plaintiffs allege violations of California statutory law, breach of contract, open book account, fraud, fraud, conversion, and unjust enrichment and seek compensatory, incidental, consequential, and punitive damages as well as interest and attorney’s fees.

Dottore v. FTF Lending, LLC, et al., No. CV-2024-05-1878 (Ohio Ct. Comm. Pl.); Dottore v. MHS Investors LLC, No. CV-2024-05-1904 (Ohio Ct. Comm. Pl.)

Following four other actions previewed by Ponzi Perspectives earlier this year, a court-appointed receiver initiated two more lawsuits in Ohio state court against “net winners” who received fictitious profits from the “Dente-AEM Ponzi Scheme” operated by Mark Dente and others, according to the referenced complaint filed by the State of Ohio Department of Commerce against the alleged fraudsters. While promising significant returns on real estate investments, the receiver alleges the Dente-AEM Ponzi Scheme instead allowed the fraudsters to use investor money as a personal slush fund and then paid earlier investors with new investors’ funds. Consistent with these prior suits, the receiver is seeking disgorgement of allegedly fraudulent transfers that these defendants received because the defendants allegedly provided nothing of value in exchange for those funds and did not invest in good faith. 

MJT Water Technology, LLC v. First Fed Bank, et al., No. 8:24-cv-01002 (S.D. Cal.); Alkaline Water Holdings, LLC v. Wear, et al., No. 2:24-cv-01890 (E.D. Pa.)

Several suits have been brought against schemers by investors claiming losses from defendants’ alleged $250 million Ponzi scheme. Plaintiffs allege that defendants are actively defrauding investors through a purported business model where defendants purportedly sell water vending machines to investors who then lease the machines back to defendants for management, ostensibly allowing investors to collect passive income from the sales made at these machines. When defendants allegedly stopped paying the expected royalties, investors allegedly began to discover that many of these machines never existed, and suits began to emerge.

In California, investors filed suit in federal court against the schemers and First Fed Bank, claiming the bank aided and abetted the scheme by providing a $30 million loan directly to the schemers, acting as a preferred lender, providing misrepresented investment advice, and providing schemers with the appearance of being endorsed by a legitimate bank. Accordingly, plaintiffs allege violations of California statutory law, misrepresentation, breach of fiduciary duty, conspiracy to commit fraud, breach of contract, and trespass, and they seek preliminary and permanent injunctions enjoining and restraining the scheme, entry of a receivership over the schemer company, compensatory damages, punitive damages, treble damages, and restitution.

In Pennsylvania, investors filed suit in federal court against defendant schemers and their long list of shell companies created to divert funds stolen from vending machine investors to other unrelated business endeavors. The complaint alleges plaintiffs invested nearly $2 million in the scheme due to a number of fabricated misrepresentations made to them by the schemers. In the action for losses arising from the scheme, plaintiffs allege RICO violations, common law fraud, conspiracy to commit common law fraud, breach of bills of sale, breach of management agreements, negligent misrepresentation, violations of Pennsylvania statutory law, and imposition of a constructive trust. Plaintiffs seek restitution, disgorgement, compensatory, punitive, and treble damages, constructive trust, and injunctive relief.