Investment Scam

Cleveland, Ohio Broker Philip D. Rossi Accused of Fraud

2008-11-25T17:43:00.002-05:00

Cleveland, Ohio investment adviser Philip D. Rossi was accused by a federal grand jury of swindling approximately 40 individuals, including many retirees, of $2.5 million since 2000.

The investment litigation lawyers at John S. Chapman & Associates reviewed Philip Rossi's scheme and determined that Rossi, a former registered investment broker, operated a so-called money management company, Patterson-Ross Financial Resources, as well as an accounting firm, Rossi & Associates. Pretending to be an experienced investor, Rossi induced his victims to invest their retirement savings with him. He assured his investors that he would buy stocks, bonds, or notes in their names, but in fact he spent most of their money for his personal purposes. To give a sense of security to his victims, Rossi prepared monthly "account statements" that showed the value of their supposed investments.

When his investors asked to receive returns or withdraw their investments, Rossi falsely told them that they would incur a tax penalty for early withdrawals. To postpone and discourage withdrawals, Rossi also falsely represented to his investors that post-9/11 financial regulations required background checkings before disbursing amounts in excess of $10,000 to them.

Chapman & Associates intends to vigorously prosecute Rossi investors' claims. Chapman & Associates is a securities litigation firm that often handles fraudulent investment claims on behalf of investors in FINRA arbitration. If you or a family member has been victimized in Philip Rossi's fraud, please contact us toll free at 866-220-3300 or by email at jchapman@jscltd.com.

Click here to read important statements and disclosures regarding this case.

Brentwood Stock Broker Michael J. Park Accused of Pyramid Scheme

2008-08-15T11:44:00.001-05:00

Brentwood, Tennessee stock broker Michael J. Park, whose investment business recently collapsed, was accused of perpetrating a Ponzi scheme and defrauding dozens of Nashville-area investors of up to $20 million.

Investigation by the securities law firm of Chapman & Associates determined that Michael J. Park, a registered representative with 1st Discount Brokerage, claimed to be a very successful stock trader. He made representations to investors regarding his past successes in trading securities and claimed to consistently generate high returns on his customers’ investments.

Park created all the appearances of a successful stock broker: he brandished an expensive life style, living in a posh mansion and driving expensive cars. However, unbeknownst to his investors, the money he used to pay for his life style came not from his trading profits, but from the funds deposited by his victims. Park’s operation – Park Capital Management Group – was nothing but a pyramid scheme.

Contrary to the façade of success he carefully built, Park had been consistently losing money in the stock markets, and had squandered the investor funds to buy luxury items for personal use. The supposed “profits” that were distributed to earlier investors came from deposits by later investors, as in any Ponzi scheme.

Park could perpetrate his investment scam only so long as new investors deposited money with him, according to John S. Chapman, a securities attorney. When the flow of money slowed down, he became unable to pay the promised returns to earlier investors, and his scheme collapsed, leaving victimized investors with nothing but fictitious account statements and paper profits. Park recently filed for bankruptcy.

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John S. Chapman determined that Park was able to perpetrate his scheme for so long as a result of 1st Discount Brokerage’s failure to properly supervise him and prevent him from deceiving the investors. Chapman noted that, while Park is probably insolvent and unable to pay back all investors, 1st Discount Brokerage is likely to be liable for failing to stop Park from perpetrating his pyramid scheme.

Nacogdoches Businessman George D. Hudgins Accused of Perpetrating a $90 million Ponzi Scheme

2008-08-05T16:39:00.006-05:00

Nacogdoches Businessman George D. Hudgins was accused by federal prosecutors in the Eastern District of Texas of perpetrating a $90 million Ponzi scheme, that victimized hundreds of investors nationwide.

Investigation by the securities law firm of Chapman & Associates determined that George D. Hudgins pretended to be a successful futures and options trader. He made numerous representations to investors regarding his past successes in trading various commodities and future indexes, according to documents filed in federal court. He falsely claimed past returns of between 22 and 99 percent annually, and a history of stellar profits for his investors. He put out an investment newsletter and organized investor banquets in Nacogdoches, Texas, according to court filings.

Chapman & Associates' research showed that, in reality, Hudgins's investment performance had been anything but stellar. Unbeknown to his victims, Hudgins had been consistently losing money in the commodities markets, and had squandered the investor funds to buy luxury items for personal use. The supposed "profits" that were distributed to earlier investors came from deposits by later investors, as in any Ponzi scheme.

To maintain the illusion of success, Hudgins falsified tax forms that showed how profitable his operation was, and mailed them to investors.

Hudgins was able to perpetrate his scheme so long as new investors deposited money with him, according to John S. Chapman, a securities attorney. When the flow of money slowed down, he became unable to pay the promised returns to earlier investors, and his scheme collapsed, leaving hundreds of victims with nothing but fictitious account statements and paper profits.

Former Linsco Broker James J. Buchanan Charged with Fraud

2008-06-02T14:26:00.001-05:00

Former Linsco Stock Broker James J. Buchanan was charged on May 12 with fraud and theft, according to an indictment filed with the Maricopa County Superior Court in Arizona.

The charges arose from a fraudulent scheme perpetrated by James Buchanan since 2001 in the Phoenix - Scottsdale area. Buchanan allegedly stole about $5 million from more than 30 victims, possibly as many as 40.

Most of his victims are members of the same congregation as Buchanan. They trusted him due to their common affiliation with the Christ Life Church of Tempe. Buchanan abused their trust, and also stole $1 million from his church, according to the indictment.

John S. Chapman & Associates has investigated this claim and determined that Buchanan made fraudulent promises to investors in order to get their money. He indicated that the investors' funds would be placed in safe investments that generated high rates of return. Many of his victims trusted him with their life savings.

Chapman & Associates determined that, instead of investing the money, Buchanan spent them on a 4,700-square-foot house in an expensive neighborhood and luxury cars, including a super-size BMW.

Buchanan's scheme started to fall apart when he was not able to give investors their money back. As more and more investors became suspicious, the scheme unfolded. The investors eventually alerted the Maricopa County Sherrif's Office.

Chapman & Associates' investigation determined that - as in any Ponzi scheme - a large proportion of investors' funds have been used to pay earlier investors, and Buchanan is thus insolvent. However, the investors may be able to recover their losses from Buchanan's employer, Linsco, according to John S. Chapman, Esq. "Linsco had a duty to supervise its broker, James Buchanan, and make sure he does not peddle fraudulent investments to its customers. Instead, Linsco was asleep at the wheel while Buchanan was defrauding his victims of their life savings," said Chapman.

Chapman & Associates intends to vigorously prosecute Buchanan's investors claims against Linsco. Chapman & Associates is a securities litigation firm that often handles fraudulent investment claims on behalf of investors, nationwide, in FINRA arbitration. If you or a family member has been victimized in James Buchanan's fraud, please contact us toll free at 866-220-3300 or by email at jchapman@jscltd.com. For more information about other fraudulent investment cases prosecuted by Chapman & Associates, visit us online at www.johnschapman.com .

Dallas Cattle Rancher Oscar Black Pled Guilty of Fraud

2008-05-23T13:50:00.000-05:00

Texas cattle rancher Oscar Black, who owned Weeatherford-based OB Cattle, entered a guilty plea in federal district court for mail fraud. He is scheduled to be sentenced in September 2008 and faces up to 20 years in prison.

Black perpetrated a Ponzi scheme, whose victims were mostly Texas investors. He offered "investment opportunities" to his acquaintances, with a "guaranteed" rate of return of 12% annually. As his business was unable to generate such returns, he eventually began using new investors' money to pay earlier investors, creating a typical pyramid scheme.

To further his scheme and raise new funds, Black falsely assured investors that their investment had appreciated, when in fact their money was being used to meet financial obligations to earlier investors. He even generated fictitious monthly account statements that showed how the investments supposedly appreciated.

Black's scheme caught up with him when he became unable to raise new funds, and the pyramid scam collapsed. Individual investors stand to lose up to $3.1 million in Black's OB Cattle scheme.

Chapman & Associates is investigating Oscar Black’s investment fraud and preparing to help aggrieved investors recover their losses. Chapman & Associates often represents, on a contingency fee basis, individuals who have lost their savings in fraudulent investment schemes. If you have lost money in Oscar Black's OB Cattle fraud, please contact us immediately by email at jchapman@jscltd.com, or phone at 866-220-3300.

Ed May and Frank Bluestein Accused of Perpetrating $250 Million Fraud

2008-01-18T13:32:00.000-05:00

Edward May and Frank Bluestein, both residents of the metro Detroit area, are under investigation by the FBI for allegedly perpetrating a huge pyramid scheme in Michigan and across the country.

Ed May’s investment fraud may have victimized as many as 1,200 investors, whose lost savings may have totaled as much as $250 million, according to a complaint filed against him by the Securities and Exchange Commission. Frank Bluestein, an investment broker, allegedly assisted him in perpetrating the fraud by selling the unregistered securities to investors.

Chapman & Associates is preparing to take action against the perpetrators of the E-M Management scheme and those who were supposed to watch them, on behalf of aggrieved investors. Chapman & Associates often represents, on a contingency basis, individuals who have lost their savings in fraudulent investment schemes.

If you have lost money in the E-M Management scam, please contact us immediately by email (click here) or at 866-220-3300.

Bryan Behrens Accused of Defrauding Elderly Investors with Pyramid Scheme

2008-01-18T13:06:00.000-05:00

Bryan S. Behrens of Omaha, a former investment broker, engaged in securities fraud through his company, National Investments Inc., and collected $6.5 million from about 20 investors, according to a complaint recently filed by the Securities and Exchange Commission.

Behrens allegedly promised his investors, many of them senior citizens, high interest rates that would provide a steady monthly income. The money, however, were not invested in profitable businesses, but were used by Behrens to support his lavish life style, stated the complaint.

Chapman & Associates is investigating Bryan Behrens’ investment fraud and preparing to help aggrieved investors recover their losses. Chapman & Associates often represents, on a contingency fee basis, individuals who have lost savings in fraudulent investment schemes.

If you have lost money in Bryan Behrens' National Investments scam, please contact us immediately by email (click here) or at 866-220-3300.

Chapman & Associates, LLC Commencing Proceedings on Behalf of Victims of the Resort Holdings / Universal Lease Fraud

2007-08-29T10:39:00.001-05:00

In December 2006, the FBI arrested Resort Holdings and Yucatan Resorts owner Michael Eugene Kelly. He was charged with orchestrating a massive nationwide fraud estimated at about $400 million, with hundreds of victims. The victims, many of them senior citizens, were sold "Universal Lease Programs" that were supposed to give them a timeshare in one of Kelly's hotels and provide return payments of 9-11% annually.

In reality, the Universal Lease Programs were instruments of a Ponzi Scheme. Mr. Kelly used the investors' money to finance lavish lifestyle that included mansions in Cancun, luxury yachts, sports cars and a private jet.

Securities regulators in several states have filed Cease and Desist Orders against Michael E. Kelly and his companies, Resort Holdings and Yucatan Resorts.

To market his scam, Kelly enlisted the help of financial professionals throughout the United States. By using newspaper ads and the word of mouth, such agents lured many victims with the promise of high, "guaranteed" returns, and convinced them to invest in Kelly's Universal Leases.

One of Mike Kelly's agents was Steven Homewood, a former insurance agent. Homewood marketed Kelly's Universal Leases to numerous Illinois investors in the Chicago area. Homewood targeted especially senior citizens and ran ads in retiree magazines, offering "guaranteed" investments with rates of return between 9-11%. Many of the victims invested their life savings and IRAs in the fraudulent timeshares.

After extensive investigation, Chapman & Associates, LLC has commenced proceedings on behalf of investors who purchased Universal Leases in Yucatan Resorts and/or Resort Holdings, to help them recover their losses.

If you were sold Universal Leases / timeshares in Resort Holdings, Yucatan Resorts, or any other of Mike Kelly's companies, contact us at the toll-free number 1-866-220-3300, or by email at jchapman@jscltd.com. If the agent who sold you Universal Leases was Steve Homewood, contact us immediately.

Toledo Broker Charged in Investment Scam

2007-02-19T11:10:00.000-05:00

Former Wachovia Securities broker, William A. Sirls of was charged with money laundering and mail fraud. It is alleged that Sirls bilked more than 45 people out of $17-45 million. Sirls was the manager of the Wachovia office on West Syvania Avenue near Talmadge Road in West Toledo. Read more. It is further alleged that Sirls fraudulently solicited investments in the purported profit from nonexistent "busted trades" and "builder discounted real estate." Read More. John S. Chapman & Associates is currently investigating avenues of recovery for victims of this scam.

Sam Morocco Participates in Schneider "promissory note" scheme

2007-01-25T14:38:00.000-05:00

Samuel Morocco, an investment advisor from the Canton, Ohio area illegally sold unregistered "promissory notes" to investors for Joanne Schneider, according to an order issued by the the Ohio Division of Securities. The promissory notes, which were marketed as "safe" and "guaranteed" to produce an 18% monthly return for investors, were actually worthless. Morocco's customers lost everything when Schneider's ponzi scheme collapsed in early 2005. A group of Morocco investor have now joined together and are demanding compensation for their losses from two national stock brokerage firms. Read More. The investors are claiming these firms failed in their duty to protect the public by carefully supervising and monitoring Morocco's sales activities. The investor group is represented by John S. Chapman & Associates.

Nevin Gillette Scams Sauk Valley Investors

2007-01-25T11:58:00.000-05:00

From 1999 through 2006, Rock Falls, Illinois broker Nevin Gillette scammed about 40 Sauk Valley investors out of more than $8 million. Gillette sold investors interests in the "GIC Fund." GIC stands for "Guaranteed Investment Contracts." Gillette sold GIC Funds through his company, Executive Marketing Services of Northern Illinois. On August 25, 2006, a Temporary Order of Prohibition was entered by the Illinois Securities Department against Gillette. Read More. John S. Chapman & Associates is currently investigating avenues of recovery for victims of this scam.

Bennie Pendley Investment Fraud

2007-01-25T10:08:00.000-05:00

Bennie Pendley cheated and defrauded hundreds of investors throughout North and South Carolina. Most of Pendley's victims are from the Statesville, North Carolina area, where Pendley had an office. Pendley told customers "I'm the wife of a preacher and the daughter of a preacher. If you can't trust me, who can you trust?" Pendley abused her customers' trust. She was paid huge sales commissions for selling them fraudulent "business opportunities, such as "ETS" and "Select" payphones, and "Waterstones" internet kiosks. Pendley promised her customers, many of whom were senior citizens, that an investment in these programs was guaranteed to be safe and to produce a high rate of return. Pendley's claims were very appealing to her customers, many of whom were senior citizens. Now many of them have lost their life savings and are scrambling to make ends meet. Read more. A group of Pendley victims has banded together to recover the money they lost. They have hired the The Chapman law firm to go after Pendley's brokerage firm, claiming it failed in its duty to detect Pendley's fraudulent and illegal sales of investments. In November, 2006, The Chapman law firm helped a group of residents of North and South Carolina win an award of more than one million dollars to compensate them for money they lost under similar circumstances. Read more.