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McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021. Since that time, we’ve posted detailed case alerts of Ponzi-related complaints filed throughout the country and posted key decisions that have the potential to influence controlling law on Ponzi-related issues involving financial institutions. This 2022 year-end round up summarizes the cases and opinions analyzed…

With a new decision settling the issue, businesses run the risk of being held liable for the conduct of their customers with the potential for increased Ponzi scheme related litigation following the Pennsylvania Supreme Court’s approval of a cause of action for aiding and abetting fraud. …

Continue Reading Pennsylvania Supreme Court Recognizes a New Cause of Action Against Those Who Aid and Abet Fraud

SEC v. JMJ Capital Group and Richard Lee Ramirez is a Securities Exchange Commission (“SEC”) enforcement action filed in the United States District Court for the Southern District of California on September 30, 2022.  JMJ Capital Group (“JMJ”) is a California corporation and Richard Lee Ramirez (“Ramirez”) is the owner and sole operator of JMJ…

Guo, et al. v. Robl, et al. was filed in the United States District Court for the Central District of California on August 8, 2022.  Plaintiffs assert claims of fraudulent inducement, fraud, breach of fiduciary duty, civil racketeering under RICO, violations of the California Penal and Corporations Codes, violations of state securities laws, and breach of contract.  Plaintiffs request compensatory damages and equitable relief against defendant media production companies and related individuals and entities that allegedly induced investors into financing film projects that ultimately failed, leaving Plaintiffs with substantial losses.

Plaintiff Gosdom, Inc. (“Gosdom”) is a California corporation, and Plaintiff Vanessa Guo (“Guo”) is its Chief Executive Officer (collectively “Plaintiffs”). Defendants Kevin Robl (“Robl”) and Chris Bremble (“Bremble”) are principals and managers of Defendants Production Capital, LLC (“Production Capital”) and/or Chinese-based production company Base Media Technology Group Limited (“Base Media”), and Defendant Remington Chase (“Chase”) is the principal of Defendants Production House International, LLC (“Production House”) (collectively, “Enterprise Financing Defendants”). The remaining Defendants consist of American and Chinese filmmakers and media companies, California attorneys, and various entities based in California, Delaware, and Wyoming—all of which benefited from or were aware of the loan and investments used to finance the film projects.

The Enterprise Defendants are alleged to have engaged in a scheme to defraud …
Continue Reading New Complaint – Guo, et al. v. Robl, et al.

Securities and Exchange Commission v. Okhotnikov was filed in the United States District Court for the Northern District of Illinois on August 1, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act in connection with offering and selling unregistered smart contracts operated on the Ethereum, Tron, and Binance blockchains. Specifically, the SEC seeks permanent injunctive relief against all Defendants in order to prevent future violations of the federal securities laws, disgorgement of any ill-gotten gains, and civil damages.

The SEC brought the enforcement action against Defendants Vladimir Okhotnikov (“Okhotnikov”), Jane Doe a/k/a Lola Ferrari (“Ferrari”), Mikail Sergeev (“Sergeev”), and Sergey Maslakov (“Maslakov”)—a set of Russia-based individuals who are alleged to have created, operated, and maintained an online pyramid and Ponzi scheme through smart contracts on various blockchains (collectively, the “Founder Defendants”)—and Defendants Samuel D. Ellis (“Ellis”), Mark F. Hamlin (“Hamlin”), and Sarah L. Theissen (“Theissen”) who are individuals alleged to have engaged in the promotion or sale of the smart contracts to investors within the United States (collectively, the “Promoter Defendants”).

The complaint alleges that in the fall of 2019, the Founder Defendants formed Forsage.io (“Forsage”), an unincorporated entity, for the purpose of coding smart contracts on various blockchains and building a website that would serve as an interface for the promotion and sale of the smart contracts. However, the complaint alleges that from January 2020 until the present, Defendants operated, promoted, and maintained an online pyramid and Ponzi scheme through Forsage, allowing millions of retail investors to enter into transactions via the sale of unregistered smart contracts maintained on the Ethereum, Tron, and Binance blockchains. To date, the transactions have totaled over $300 million.…

Continue Reading New Complaint – SEC v. Vladimir Okhotnikov, et al.

Securities and Exchange Commission v. Alexandra Robert et al. was filed in the United States District Court for the Southern District of Florida on July 26, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act. Specifically, the SEC seeks permanent injunctive relief against all Defendants in order to prevent future violations of the federal securities laws, disgorgement of any ill-gotten gains, and civil damages.

The SEC brought this action against Defendants Alexandra Robert (“Robert”), the owner, founder, and CEO of Defendants Chalala Academy LLC (“Chalala”), a Florida limited liability company, and Lendvesting Academy Corp. (“Lendvesting”), a Florida-registered corporation formerly operating as a d/b/a of Chalala.

The complaint alleges from at least May 2020 through August 2021, Defendants fraudulently raised approximately $900,000 from roughly 80 investors, mostly Haitian and Haitian-Americans living in South Florida, by offering unregistered “investment programs” falsely promising guaranteed returns of up to 48%. Defendants falsely told investors that they would make interest generating loans to small businesses that would otherwise not qualify for traditional financing, thereby providing investors with high fixed returns.…

Continue Reading New Complaint – SEC v. Alexandra Robert, et al.

McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021.  Since that time, our focus is to track key cases and decisions that have the potential to influence controlling law on Ponzi-related issues.  The blog also offers analysis on practical considerations when defending Ponzi litigation.  This 2022 mid-year round up summarizes the new…

Securities and Exchange Commission v. Minuskin, et al. was filed in the United States District Court for the Southern District of California on April 8, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act. Specifically, the SEC seeks permanent injunctive relief against all Defendants to prevent future violations of the federal securities laws, disgorgement of any ill-gotten gains, and civil penalties.

The SEC brought this action against Julie Minuskin (“Minuskin”), Dennis DiRicco (“DiRicco”), Thomas Casey (“Casey”), Golden Genesis, Inc. (“Golden Genesis”), and Joshua Stoll (“Stoll”) (collectively “Defendants”).  According to the complaint, Defendant Minuskin created Retire Happy LLC (“Retire Happy”), a Nevada limited liability company, which specialized in self-directed IRAs and provided financial education on how to leverage retirement accounts and create passive income by promoting self-directed retirement accounts. Defendant DiRicco was the Chief Financial Officer and board member of Defendant Golden Genesis and the managing member of non-party Until Tomorrow LLC (“Until Tomorrow”). Defendant Casey is the majority owner, Chief Executive Officer, and board member of Defendant Golden Genesis. Defendant Stoll was an account specialist at Retire Happy.…

Continue Reading New Complaint – SEC v. Minuskin, et al.

Oregon JV LLC v. Advanced Investment et al. was filed in the United States District Court for the District of Oregon on March 2, 2022. Plaintiff asserts claims sounding in fraud and requests compensatory and equitable relief against a construction lender and other individuals and entities that funded various loans to a homebuilder with a history of fraud and embezzlement.

Plaintiff is a company that managed a construction loan pool for non-party Joseph Russi.  Defendant Advanced Investment Corp (“AIC”) is an Oregon-based corporation that previously managed the loan pool at issue. The remaining Defendants consist of trustees of various trusts, Oregon-based financial institutions, and several Oregon residents, all of which were investors in the subject loan pool (the “Defendant Lenders”).…

Continue Reading New Complaint – Oregon JV LLC v. Advanced Investment et al.

Chan v. Anthony, et al. was filed in the District Court for Denver County, Colorado on March 1, 2022, asserting claims under the Colorado Securities Act for securities fraud, investment advisor fraud, unlicensed broker/dealer activity, unlicensed investment adviser activity, and unregistered securities.

Tung Chan (“Chan”), Colorado’s Securities Commissioner, brought this action against Defendant David Anthony (“Anthony”) and nine unlicensed investment companies that he owned and operated (collectively with Anthony, the “Defendants”).  Chan also included Anthony’s wife as a relief defendant to claw back funds from the scheme used for the Anthonys’ personal expenses.…

Continue Reading New Complaint – Chan v. Anthony, et al.