McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021 to track key decisions and new cases in Ponzi civil and criminal litigation. Ponzi Perspectives focuses on cases and decisions that have the potential to influence controlling law on Ponzi-related issues. The blog also offers analysis of key decisions and practical considerations when
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”).
Fatime Abdel-Fakhara, et. al. v. The State of Vermont, et. al., was filed in the United States District Court for the District of Vermont on August 24, 2021 by investors claiming that the State of Vermont and several individual Defendants wrongfully solicited and used investor funds to complete the last two phases of a Vermont ski resort after they had knowledge that the first six phases were funded through a Ponzi scheme. The complaint alleges claims for: (1) civil conspiracy under 42 U.S.C. § 1983; (2) constitutional taking without just compensation against the State of Vermont; (3) constitutional taking with no Due Process against the State of Vermont; and (4) gross negligence against the individual defendants.
Continue Reading New Complaint – Fatime Abdel-Fakhara v. The State of Vermont
Mills v. Trustmark National Bank, et al. was filed in the Southern District of Mississippi on August 19, 2021 by a receiver appointed on behalf of companies engaged in a scheme to defraud investors by producing false deeds for the purchase and sale of timber.
Plaintiff Alysson Mills (“Plaintiff”) is the Receiver for Arthur Adams (“Adams”) and his company turned Ponzi scheme Madison Timber Properties, LLC (“Madison Timber”). The defendants are Trustmark Corporation d/b/a Trustmark National Bank (“Trustmark”), Southern Bancorp Bank (“Southern”), Riverhills Bank (“Riverhills”), Bennie Butts (“Butts”), and Jud Watkins (“Watkins”) (collectively, “Defendants”). Butts and Watkins were employees of Trustmark and Riverhills during the alleged Ponzi scheme.
Puleo, et al. v. Nelson, et al. was filed in the Central District of California on August 10, 2021, seeking damages based on more than thirty claims for violation of various state and federal securities laws, elder financial abuse, fraud, negligent misrepresentation, and conspiracy to commit fraud in connection with a real estate Ponzi scheme.
Plaintiffs are numerous individual and trustee investors who invested in student housing projects either as individuals, through their business enterprises, or as trustees of trusts. Defendants are Nelson Partners, a California limited liability company that sponsored the offering of the real estate interests, Patrick Nelson as the sole owner, president, and chief executive officer of Nelson Partners (collectively, “Nelson Partners”), Axonic Capital LLC, a hedge fund (“Axonic”), and various other individual and corporate investment advisors and funds affiliated with Nelson Partners and Axonic.
Morrison, et al. v. Rockwell, et al. was filed in California Superior Court, Marin County, on May 28, 2021. The complaint seeks civil damages for claims of breach of fiduciary duty, multiple violations of the California Corporations Code, constructive fraud, breach of contract, and negligence.
Plaintiffs are a group of investors who used Defendants as investment advisors. Defendants are a series of corporate entities, Dow Rockwell, LLC, Rockwell Retirement Partners, and Marin Wealth Management, LLC, an individual investment advisor, Rick Rockwell, and many unnamed defendants Plaintiffs believe may have been involved in aiding Defendants.
SEC v. The Estate of Kenneth J. Casey is a case filed by the SEC in the United States District Court for the Northern District of California on June 2, 2021, claiming that Kenneth Casey (“Casey”), the founder of Professional Financial Investors, Inc. (“PFI”), a real estate investment and management company, personally misappropriated over $10 million from investors as part of a scheme where Casey falsely told investors that their money would be used to invest in multi-unit residential and commercial real estate. Specifically, the complaint alleges that Casey violated 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5, and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
According to the complaint, Casey’s fraudulent scheme began to unravel shortly after his death, when questions arose about the solvency of PFI and one of Casey’s other companies, PISF. The SEC had previously filed an action against the president of PFI for his role in a fraudulent scheme to misappropriate funds from investors.