yLoft, LLC v. Bechtler, Parker & Watts, P.S.C. was filed in the Circuit Court for Jefferson County, Kentucky on January 18, 2022, asserting claims for negligent misrepresentation, fraudulent misrepresentation, violation of state securities laws, and unjust enrichment against an accounting firm alleged to have facilitated the sale of unregistered securities.

Plaintiffs are individuals and institutional investors that invested in promissory notes sold by non-parties ACS Payment Solutions, LTD Co. d/b/a ACS Payment Solutions, LLC and ACS Payment Solutions II Incorporated (collectively, “ACS”).  Defendant Bechtler, Parker & Watts, P.S.C. (“BPW”) is an accounting firm owned by Defendant Christopher J. Bechtler (“Bechtler”) that performed accounting services for ACS and Plaintiffs.  Defendants are alleged to have engaged in a scheme with ACS to solicit and defraud outside investors, including Plaintiffs.

Continue Reading New Complaint – yLoft LLC v. Bechtler, Parker, Watts, P.S.C.

Andersen, et al. v. Gigapix Studios, Inc. was filed in the Superior Court of California, County of Sacramento on January 13, 2022 seeking civil damages for claims of fraud and misrepresentation.

Plaintiffs are a group of individuals who invested in Defendant Gigapix Studios, Inc. (“Gigapix”).  Gigapix is an animation company that solicited investors by advertising that it would generate large profits from prospective projects.

Plaintiffs allege that Gigapix was founded by Christopher Blauvelt and led by David Pritchard, who purchased investor lead lists and hired telemarketers to solicit potential investors.  Investors were told that Gigapix was an animation company on the verge of an initial public offering or reverse merger with a public company that would net high returns for investors.  In reality, however, Plaintiffs allege that Gigapix was a Ponzi scheme that materially misrepresented the funds that would be spent on producing shows and movies, the anticipated timing of returns on investment, the level of risk involved, and the success of prior Gigapix projects.

Continue Reading New Complaint – Andersen, et al. v. Gigapix Studios, Inc.

Schwartz v. McGregor was filed in the District Court of Denver County, Colorado on January 10, 2022, seeking relief under Colorado’s Uniform Fraudulent Transfer Act, C.R.S. § 38-8-101-112 (“CUFTA”), including a turnover and accounting and damages for actual and constructive fraud.

Plaintiff Gary Schwartz is a court-appointed Receiver (“Receiver”) on behalf of a multi-million-dollar fraudulent investment scheme perpetrated by Mark Ray (“Ray”).  The Receiver was appointed over Mark Ray, Custom Consulting & Product Services, LLC, MR Cattle Production Services, LLC, Universal Herbs, LLC, DBC Limited, LLC, RM Farm & Livestock, LLC, Sunshine Enterprises (the “Estate entities”). Defendant Eric McGregor (“Defendant”) was an investor in the Ponzi scheme who allegedly received numerous avoidable transfers from the Estate entities.

Continue Reading New Complaint – Schwartz v. McGregor

Backed by unrealistically ambitious owners, well-intentioned business ideas that fail to meet expectations or become unsustainable regrettably often become full-fledged Ponzi schemes.  Today’s Growth Consultant, Inc. (“TGC”) represents an entity that faced the same fate.

TGC advertised to potential investors its expertise in building, acquiring, and monetizing online websites.  Investors paid an upfront fee to TGC to purchase, host, maintain, and market the investors’ websites in exchange for TGC’s guarantee that investors would receive a minimum rate of return in perpetuity on the revenues TGC generated from those websites.  TGC raised at least $75 million during a nearly three year period, but its business model proved unsuccessful—it failed to timely purchase and build the promised websites or generate the promised revenue to cover the guaranteed returns to investors.  Instead, TGC turned into a Ponzi scheme to sustain its failing business by paying early investors with money it raised from later investors.

TGC maintained its business bank accounts at Defendants Heartland Bank and Trust Company (“Heartland”) and PNC Bank, N.A. (“PNC”) (collectively, “Defendants”).  TGC banked with Heartland until October 2018, and with PNC thereafter until December 2019.  Defendants provided TGC with typical banking services, including deposit accounts, commercial loans and revolving lines of credit, ACH capabilities, and transfers into, out of, and among TGC’s accounts.

In a recent decision in PLB Investments LLC et al. v. Heartland Bank and Trust Co. et al., the Northern District of Illinois decided that various defrauded investors of TGC (“Plaintiffs”) did not set forth sufficient allegations to show actual knowledge of a Ponzi scheme or bad faith in support of various Illinois state law claims against PNC.  No. 20 C 1023, 2021 WL 5937152 (N.D. Ill. Dec. 15, 2021).  While different jurisdictions set varying thresholds for adequately alleging actual knowledge or bad faith, PLB Investments emphasizes the importance of analyzing these elements early on to determine whether a plaintiff has alleged sufficient facts on the pleadings.

Continue Reading Illinois Federal Court Carves Up Plaintiffs’ Ponzi Scheme Claims For Lack of Actual Knowledge or Bad Faith

Securities and Exchange Commission v. BNZ One Capital, LLC, et al. was filed in the United States District Court for the Central District of California on October 28, 2021 claiming Defendants violated the antifraud provisions of the Securities Act,  the Securities Exchange Act,  and Rule 10b-5 thereunder, as well as the registration provisions of the Securities Act. The SEC also brings claims against individual Defendants Barber and Zimmerle for violations of the broker-dealer registration provisions of the Exchange Act and accuses them of being secondarily liable for BNZ’s fraud as control persons pursuant to the Exchange Act.

Continue Reading New Complaint – SEC v. BNZ One Capital, LLC, et al.

Marfleet v. Hardin, et al. was filed in the Western District of Tennessee on October 20, 2021. The complaint alleges Defendants operated a nationwide real estate Ponzi scheme that defrauded investors by falsely promising “secured” real estate investments and above-market rates of return in exchange for capital.

Plaintiff Barry Marfleet (“Plaintiff”) is an individual investor. Defendants are James Hardin and his two companies, Defendant Hardin Enterprises Inc. and Defendant MRH Holdings, LLC, (collectively “Defendants”).

Continue Reading New Complaint – Marfleet v. Hardin, et al.

Securities and Exchange Commission v. Woods, Livingston Group Asset Management Company d/b/a Southport Capital, and Horizon Private Equity, III, LLC was filed in the United States District Court for the Northern District of Georgia on August 20, 2021. The SEC alleges that Defendants defrauded investors, many of whom were elderly, with illusory promises of guaranteed returns for their investment in the Defendants’ affiliated fund.

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

SEC v. Bullard, et al. is a new complaint filed by the SEC in the District of Minnesota on August 27, 2021.  The complaint alleges Jason Dodd Bullard and his wife Angela Romero-Bullard (the “Bullards”), the owners of Bullard Enterprises LLC (collectively “Defendants”), defrauded around 200 investors of approximately $17.6 million as part of a Ponzi scheme where the Bullards falsely claimed investors funds would be used to trade foreign currencies. The complaint alleges Defendants violated Section 17(a) of the Securities Act and Section 10(b) and Rule 10-b-5 of the Securities Exchange Act.

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