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Ponzi Scheme

Zions Bank Sign

When investors put money into an enterprise, how do they know that it’s being used as claimed? The complaint for this class action claims that the Silver Pool supposedly run by Gaylen Rust was a Ponzi scheme with no reality to it. However, the defendant in the case is not Rust but Zions Bancorporation, which the complaint claims should have seen evidence that Silver Pool funds were being diverted to other uses. 

Machine Working to Develop Land

This class action concerns investment offerings known as United Development Funding (UDF), and specifically UDF III. The complaint alleges that the defendants made false statements about UDF III’s success to induce people to invest or to invest more. It backed up the false statements by distributions—which, according to the complaint, were not in fact earnings from UDF III, but money paid for investments in UDF IV and UDF V. Since the securities were never offered for sale on an exchange, certain federal securities laws do not apply. The complaint claims violations of the Texas Securities Act, among other things.

People's United Bank Logo

Investors bring this class action against companies they believed would build a Jay Peak Ski Resort in Vermont—People’s United Financial, Inc. and People’s United Bank. But according to the complaint, the money they put up went to an alleged Ponzi scheme, finally uncovered in a two-year investigation by the Securities and Exchange Commission (SEC).

Word "Fraud" in Red Circle with Strikethrough

The complaint for this class action alleges that a Ponzi scheme built around Towers Financial Corporation (TFC) took millions of dollars from over 200,000 investors between the late 1980s and the mid-1990s. One of the parties to this scheme, Steven Hoffenberg, was convicted and sentenced to twenty years in prison, plus fined and required to apy over $450 million in restitution. This case seeks penalties for The Financial Trust Company (TFTC), Jeffrey E. Epstein, and other entities involved in the scheme.

Keyboard with Sign, "Warning. Ponzi Scheme."

Did Bank of America enable a Ponzi scheme involving over a hundred Bank of America accounts? The complaint for this class action claims the scheme was created and operated by the five conspirators and the companies they set up, but it involved the use of over one hundred Bank of America accounts. The complaint claims that the account activities should have raised red flags and alerted the bank to what was going on. 

BitConnect Logo

It’s a wonder that buyers still exist for new cryptocurrrencies that show no signs of any serious underpinnings to support their claims. The complaint for this class action alleges that BitConnect coins are unregistered securities, a fraud, and a Ponzi scheme. Income from BitConnect coins is purportedly obtained through up to 40% interest per month, an additional daily rate of interest, profits generated by “volatility software,” and a commission on purchases made by referrals. The complaint alleges that BitConnect coins are unregistered securities, sold in violation of the Securities Act of 1933, and that the defendants have engaged in common fraud as well as fraud in the purchase or sale of securities in violation of the Securities Exchange Act of 1934. 

City National Bank Building

Two men, Joel Barry Gillis and Edward W. Wishner, are now in prison for running NASI, a company that operated a Ponzi scheme purporting to sell ATMs to investors in return for “rentals” from ATM fees. How did they get away with it for fifteen long years? According to the complaint for this class action, they were aided and abetted by a bank Senior Vice-President who used his position as well as the bank’s credibility and resources on their behalf in exchange for profiting from the scheme. Fitzwilliam performed many services to help keep NASI in business, according to the complaint, such as granting it immediate loans to cover shortfalls to make lulling payments to investors; writing promotional letters vouching for NASI as its banker; and talking to investors who were beginning to get suspicious and assuring them that NASI was legitimate. Since all of these supportive actions were undertaken in the regular scope of his employment at CNB, the complaint claims, the bank is liable for his actions.