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 2023 year-end round up summarizes the cases and opinions analyzed throughout the year and highlights anticipated trends for 2024.

Continue Reading… Ponzi Perspectives: 2023 Year-End Roundup

September was an active month for Ponzi litigation with nearly a dozen new complaints filed alleging fraudulent investment activity. The SEC continues to drive Ponzi-related litigation; in addition to four enforcement actions brought last month, previous SEC litigation precipitated several complaints filed by investors and court-appointed receivers. Consistent with the trends discussed in Ponzi Perspective’s Midyear Roundup, the majority of actions filed in September involved real estate investment schemes and targeted solicitation of affinity groups.

Notable litigation filed in September 2023 includes: (1) Conlan v. Roach, et al.; (2) Reispec Develop. LLC v. Pina, et al.; (3) Dottore v. SDR Realty; (4) SEC v. Kubler, et al.; (5) McGrath v. Palowet Inv., LLC; (6) SEC v. Feloni, et al.; (7) SEC v. Aras Inv. Bus. Grp., et al.; (8) American Eagle Oil & Gas Co., et al. v. Navarro Prod. Co., et al.; (9) Luppino v. Spano, et al.; and (10) SEC v. Motil, et al.

Continue Reading… Notable Litigation – September 2023

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

Continue Reading… Ponzi Perspectives: 2022 Year-End Roundup

On August 31, 2022, Plaintiff Melanie E. Damian, in her capacity as the Court-Appointed Receiver for Today’s Growth Consultant, Inc. d/b/a The Income Store (“TGC”) (the “Receiver”) filed a complaint against Defendant Core Financial Outsourcing of Chicago (“Core Financial”) in the Northern District of Illinois (“Damian II”) seeking damages, injunctive relief, interest, and attorneys’ fees and costs. The complaint alleges five claims for professional negligence, aiding and abetting breach of fiduciary duty, unjust enrichment, and two violations of the Illinois Uniform Fraudulent Transfer Act.

This action stems from a prior enforcement action seeking civil penalties and injunctive relief filed by the Securities and Exchange Commission (“SEC”) against TGC and its founder, Kenneth D. Courtright, III (“Courtright”), based upon TGC and Courtright’s alleged violation of federal securities laws and operation of a website services Ponzi scheme.

We previously wrote about PLB Investments LLC et al v. Heartland Bank and Trust Co. et al., a related case initiated by various defrauded investors of TGC against two bank defendants that
Continue Reading… New Complaint – Damian as Receiver of Today’s Growth Consultant, Inc. v. Core Financial Outsourcing of Chicago, LLC

Conlan v. Alternative Asset Management Acquisition Corp. was filed in the United States District Court for the District of Colorado on June 14, 2022, claiming Defendants illegally profited from violations of securities laws. The complaint seeks to avoid multiple actual and constructive fraudulent transfers.

Plaintiff is court-appointed substitute receiver Mark Conlan (the “Receiver”), serving as representative and fiduciary of the creditors of the defendants named in the action brought by the Securities and Exchange Commission (“SEC”) captioned United States Securities and Exchange Commission v. Mediatrix Capital Inc., et al., No. 1:19-cv-02594-RM-SKC (the “SEC Action”).  Defendants Alternative Asset Management Acquisition Corp., Autumn Gold Service, Crown Financial Services, Crown Private Limited, Marta Nystrom, Mercury Alternative Fund, Patricia Velcich, Phenom Ventures, Ritossa Investment Holding Ltd., and Y Man Investments are brokers that allegedly received funds in connection with the foreign currency trading scheme at issue in the SEC Action.

The SEC Action names individuals Michael A. Young, Michael S. Stewart, and Bryant E. Sewall and entities Mediatrix Capital Inc. (“Mediatrix”), Blue Isle Markets Inc., and Blue Isle Markets Ltd. (collectively, the “Receivership Defendants”).

Continue Reading… New Complaint – Conlan v. Alternative Asset Management Acquisition Corp.

On May 27, 2022, Plaintiff Melanie E. Damian, in her capacity as the Court-Appointed Receiver for Today’s Growth Consultant, Inc. d/b/a The Income Store (“TGC”) (the “Receiver”) filed a complaint against Defendant SmithAmundsen, LLC (“Defendant”) in the Northern District of Illinois seeking damages, restitution, interest, and costs.  Specifically, the complaint alleges two claims for legal malpractice and aiding and abetting breach of fiduciary duty.

This action stems from a prior action filed by the Securities and Exchange Commission (“SEC”) against TGC and its founder, Kenneth D. Courtright, III (“Courtright”), wherein the SEC alleged TGC and Courtright violated federal securities laws and sought civil penalties and injunctive relief to halt their wrongful activity.

We previously wrote about PLB Investments LLC et al v. Heartland Bank and Trust Co. et al., a related case initiated by various defrauded investors of TGC against two bank defendants concerning TGC’s website services Ponzi scheme.

Continue Reading… New Complaint – Damian, as Receiver of Today’s Growth Consultant, Inc. v. SmithAmundsen, LLC

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

Freitag, as Receiver for ANI Development LLC v. Dean Libs, et al. was filed in the Southern District of California on January 25, 2022, asserting one claim for fraudulent transfer.

Plaintiff is the court-appointed permeant receiver for ANI Development LLC (“ANI Development”), American National Investments, Inc., and their subsidiaries and affiliates (“Receivership Entities”) in an action titled SEC v. Gina Champion-Cain, et al., Case No. 3:19-cv-01628-LAB-AHG (“SEC Action”).  Plaintiff was appointed Receiver in the SEC Action and was vested with exclusive authority and control over the assets of the Receivership Entities, as well as investigatory powers.  This action is against Defendant Dean Libs, in his individual capacity, and Defendant Dean Libs Inc., a California corporation.

Continue Reading… New Complaint – Freitag, as Receiver for ANI Development LLC v. Dean Libs, et al.