Ponzimonium

Endnotes

1. Testimony of Harry Markopolos, CFA, CFE Before the H. Comm. On Fin. Servs. at 26 (Feb. 4, 2009).

CHAPTER ONE

1. United States v. Diamond, No. 09-cr-00586 (M.D. Fla. Nov.6, 2009) (order denying defendant’s motion for reconsideration of the court’s order of detention).

2. Complaint for Injunctive and other Equitable Relief for Civil Penalties under the Commodity Exchange Act pp. 32–33, CFTC v. Diamond, No. 09-cv-1811 (M.D. Fla. Sept. 3, 2009).

3. Id. p. 20.

4. Id. p. 21.

5. Id.

6. Complaint, supra note ii, p. 20; Indictment p.17, Diamond, No. 09-cr-00586 (M.D. Fla. Dec. 17, 2009).

7. Indictment, supra note vi, pp. 4, 17.

8. Plaintiff’s Memorandum in Support of its Renewed Motion for Preliminary Injunction and Other Equitable Relief, Ex. 1 Declaration p. 2, Diamond, No. 09-cv-1811(M.D. Fla. Sept. 10, 2009).

9. Pl.’s Mem., supra note viii, Ex. 4 Decl. pp. 4–5.

10. Pl.’s Mem., supra note viii, Ex. 3 Decl. at Ex. A.

11. The program, 5Minute Forex™, was available on e-bay for $199.97. Fortunately, recent Internet searches indicate that it is no longer available.

12. Pl.’s Mem., supra note viii, Ex. 4 Decl. pp. 4–6.

13. Id. pp. 7–10.

14. Id. pp. 12–13, 19–20.

15. Pl.’s Mem., supra note viii, Ex. 1 Decl. p. 4, Attach. A.

16. Id.

17. Complaint, supra note ii, p. 27.

18. USA v. Beau Diamond, Case No. 09 Cr-586, United States District Court Middle District of Florida, Tampa Division, Dkt. 110, Verdict Form, July 21, 2010.

19. Id., Dkt. 132, Criminal Judgment, December 22, 2010.

20. U.S. Commodity Futures Trading Commission v. Beau Diamond and Diamond Ventures LLC, Case No. 09 CV 1811, United States District Court for the Middle District of Florida, Tampa Division, Dkt. 59, Final Judgment Order of Restitution and Civil Monetary Penalty Against Defendants Beau Diamond and Diamond Ventures LLC, December 30, 2010.

21. Pl.’s Mem., supra note viii, Ex. 3 Decl. Attach. I.

CHAPTER TWO

1. Declaration of Temporary Receiver Barry A. Fisher in Support of Plaintiff Securities and Exchange Commission’s Application for Preliminary Injunction and Appointment of a Receiver Ex. 5, SEC v. Billion Coupons, Inc., No. 09-cv -00068 (D. Haw. Feb. 27, 2009) (Consolidated with CFTC v. Billion Coupons, Inc., No. 09-cv-00069 (D. Haw. Feb. 18, 2009)).

2. Complaint for Permanent Injunction, Civil Monetary Penalties, and Other Equitable Relief p. 15, Billion Coupons, Inc., No. 09-cv-00069 (D. Haw. Feb. 18, 2009).

3. Consent Order of Permanent Injunction and Other Equitable Relief against Defendant Marvin Ray Cooper p. 18, Billion Coupons, Inc., No. 09-cv-00068 (D. Haw. July 29, 2009).

4. Id. p.15; Declaration of Curt K. Hasegawa in Support of Plaintiff Securities and Exchange Commission’s Ex Parte Application for a Temporary Restraining Order Ex. 1 at 1, Billion Coupons, Inc., No. 09-cv-00068 (D. Haw. July 29, 2009).

5. Consent Order, supra note iii, pp. 16, 19.

6. Decl. of Curt K. Hasegawa, supra note iv, Ex. 2 at 9–10.

7. Id. at Ex. 1 at 1, Ex. 2 at 10.

8. Id. at Ex. 2 at 10.

9. Id. at Ex. 2 at 9.

10. Id. at Ex. 2 at 9.

11. Decl. of Curt K. Hasegawa, supra note iv, p.9, Ex. 2.

12. Id. at Ex. 2 at 9–10, Ex.6 at 60.

13. Id. at Ex 2 at 11; See also http://www.taxexemptworld.com/organization.asp?tn=1573975.

14. Decl. of Curt K. Hasegawa, supra note iv, Ex. 2 at 9–10.

15. Id. at Ex. 5 at 39.

16. Id. at Ex. 6 at 60–64; Decl. of Barry A. Fisher, supra note i, Ex. 5 at 1–2; Plaintiff Securities and Exchange Commission’s Reply Memorandum in Support of Application for Preliminary Injunction at 2, Billion Coupons, Inc., No. 09-cv-00068 (D. Haw. Feb 27, 2009).

17. Complaint, supra note ii, pp. 1, 27–28, 30.

18. Inventory of Receiver Exs. A, B, Billion Coupons, Inc., No. 09-cv-00068 (D. Haw. Mar. 23, 2009).

19. Consent Order, supra note iii.

CHAPTER THREE

1. Plaintiff’s Ex Parte Motion for a Statutory Restraining Order Ex. 8J, CFTC v. Atwood & James, Ltd., No. 09-cv-06032 (W.D.N.Y. Jan. 23, 2009).

2. Complaint for Injunctive and other Equitable Relief for Civil Penalties under the Commodity Exchange Act p. 2, 22, 28, CFTC v. Atwood & James, Ltd., No. 09-cv-06032 (W.D.N.Y. Jan. 22, 2009).

3. Plea Agreement pp. 1, 5, United States v. Kardonick, 10-cr-06068 (W.D.N.Y. May 18, 2010).

4. Id.

5. Complaint, supra note ii, p.19; Pl.’s Ex Parte Mot., supra note i, Exs. 2 p.5, 8J.

6. Complaint, supra note ii, pp. 21–23.

7. Id. p. 32; Pl.’s Ex Parte Mot., supra note i, Ex. 8J.

8. Complaint, supra note ii, pp. 33, 37, 44, 47–49.

9. Id. p. 51.

10. Criminal Complaint, Black Aff. pp. 4–6, 35, United States v. Kardonick, No. 09-mj-00562 (W.N.Y. May 7, 2009).

11. Complaint, supra note ii, pp. 14–15, 17, 56–58, and 61; Criminal Complaint, Black Aff., supra note x, pp. 11–13.

12. Atwood & James, Ltd., No. 09-cv-06032 (W.D.N.Y. Jan. 23, 2009) (Ex Parte Statutory Restraining Order).

13. Atwood & James, Ltd., No. 09-cv-06032 (W.D.N.Y. April 29, 2009) (Decision and Order).

14. Kardonick, No. 10-cr-06068 (W.D.N.Y. May 18, 2010) (Sentencing Guideline Order).

15. Brett Davidsen, I-Team 10 Investigations: Multi-million $$ Investment Fraud, WHEC TV, May 20, 2010.

CHAPTER FOUR

1. Press Release, U.S. Department of Justice, U.S. Attorney’s Office, N. Dist. of Ga., Currency Fund Manager Pleads Guilty to Perpetrating Ponzi Scheme (May 21, 2009).

2. Complaint for Permanent Injunction, Civil Monetary Penalties, and other Equitable Relief p. 1, CFTC v. CRE Capital Corp., No. 09-cv-0115 (N.D. Ga. Jan. 15, 2009); Complaint for Injunctive and Other Relief, SEC v. CRE Capital Corp. p.2, No. 09-cv-0114 (N.D. Ga. Jan. 15, 2009). (CRE Capital Corp., Nos. 09-cv-0115 and 09-cv-0114 were consolidated.)

3. Complaint, supra note ii, p. 16, No. 09-cv-0115 (N.D. Ga. Jan. 15, 2009).

4. Id. p. 3.

5. Motion for Default Judgment as to Defendant James G. Ossie and Supporting Memorandum of Law at 2, CRE Capital Corp., No. 09-cv-0114 (N.D. Ga. Apr. 6, 2009).

6. Complaint, supra note ii, p. 13, No. 09-cv-0115.

7. Mot. for Default J., supra note v, at 5, 8, 13.

8. Id. at 9.

9. Id.

10. Id.

11. Id. at Ex. 2.

12. Id.

13. Complaint, supra note ii, p. 3, No. 09-cv-0114.

14. Complaint, supra note ii, p. 17, No. 09-cv-0115.

15. Id. pp. 18–19, 23.

16. U.S. Department of Justice, U.S. Attorney’s Office, N. Dist. of Ga., supra note i.

17. Id.

18. Mot. for Default J., supra note v, at 13–14, Declaration of Michael Fuqua pp. 6–11.

19. Department of Justice, United States Attorney’s Office, Northern District of Georgia, supra note i.

20. Press Release, U.S. Department of Justice, Currency Fund Manager Sentenced to Nearly 7 Years in Federal Prison for Perpetrating Ponzi Scheme (July 30, 2009).

21. On April 19, 2010, the Honorable Judge Richard W. Story of the United States District Court for the Northern District of Georgia entered a Final Judgment as to Defendant James G. Ossie in the SEC’s civil action against CRE and Ossie. Among other things, the Judgment finds Ossie liable for disgorgement of $1,793,925.95, representing profits gained as a result of his alleged misconduct, and a $25,000 civil monetary penalty. Final Judgment as to Defendant James G. Ossie, CRE Capital Corp., No. 09-cv-0114 (N.D. Ga. Apr. 19, 2010).

CHAPTER FIVE

1. Kathy Lien & Boris Schlossberg, Millionaire Traders: How Everyday People are Beating Wall Street at Its Own Game 77 (2007). The 2010 edition of Millionaire Traders does not include the Chuck Hays chapter.

2. Id. pp. 23–25.

3. Id. pp. 25–26

4. Id. p. 31.

5. Lien & Schlossberg, supra note i, at VII.

6. Id. at 77.

7. Complaint, supra note ii, p. 27.

8. Id. pp. 28–29.

9. Press Release, U.S. Department of Justice, Minnesota Man Arrested in Connection with Ponzi Scheme (Feb. 5, 2009).

10. Press Release, U.S. Department of Justice, Minnesota Man Pleads Guilty to Running Ponzi Scheme (Apr. 15, 2009), available at http://www.justice.gov/opa/pr/2009/April/09-crm-352.html.

11. Id.

12. Press Release, U.S. Department of Justice, Minnesota Man Sentenced to 117 Months in Prison for Running a Ponzi Scheme (Apr. 27, 2010).

CHAPTER SIX

1. Andrew Del Greco, Latest Report on Recovery of Daren Palmer’s Assets for Ponzi Scheme Victims, KPVI News 6, July 16, 2009.

2. Sven Berg and Clark Corbin, Daren Palmer Revealed: The Rise, Riches and Ruin of One of Eastern Idaho’s Most Prominent Characters, Idaho Falls Post Register, November 8, 2009 at A1.

3. Complaint for Injunctive and other Equitable Relief and for Civil Penalties under the Commodity Exchange Act p. 6, CFTC v. Palmer, No. 09-cv-00076 (D. Idaho Feb. 26, 2009).

4. Memorandum in Support of Plaintiff’s Motion for Summary Judgment Against Daren L. Palmer Ex. 2 at 29, SEC v. Palmer, No. 09-cv-00075 (D. Idaho Feb. 26, 2009).

5. Id. at 29–33, 52.

6. Complaint, supra note iii, p. 27; Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, Ex. 11.

7. Complaint, supra note iii, p. 28; Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, Ex. 2 at 32–35, Ex. 11.

8. Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, Ex. 2 at 51–52.

9. Id. at Ex. 2 at 52.

10. Id. at Ex. 2 at 66.

11. Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, p. 6–7.

12. Memorandum in Support of Plaintiff’s Motion for Summary Judgment Against Daren L. Palmer 3, Palmer, No. 09-cv-00076 (D. Idaho June 17, 2010).

13. Complaint, supra note iii, pp. 27–30.

14. Id. p. 34.

15. Id. p. 35.

16. Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note xii, at 5.

17. Id. at 6.

18. Complaint, supra note iii, p. 34.

19. Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, Ex. 2 at 49–50.

20. Id. at Ex. 2 at 85–86.

21. Press Release, U.S. Commodity Futures Trading Comm’n, U.S. District Court Orders George Heffernan, a/k/a George W. Marshall, to Pay $650,000 in Sanctions in Federal CFTC Action Involving Fraudulent Commodity Trading Advice and Services (Apr. 9, 2008).

22. Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, Ex. 7 pp. 2–7.

23. Mem. in Supp. of Pl.’s Mot. for Summ. J. Against Daren L. Palmer, supra note iv, Ex. 2 at 87.

24. Id. at Ex. 2 at 89.

25. Id. at Ex. 2 at 89–91.

26. Id. at Ex. 2 at 88.

27. Id. at Ex. 2 at 87. 28

28. Third Report of R. Wayne Klein, Receiver (For Period Ending September 30, 2009) at 8, Palmer, No. 09-cv-00076 (D. Idaho Oct. 26, 2009).

29. Id.

30. Berg and Corbin, supra note ii.

31. Third Report of R. Wayne Klein, supra note xxviii, at 6.

32. Id. at 12.

33. On June 17, 2010, the CFTC filed a Motion for Summary Judgment against Palmer. Motion for Summary Judgment Against Daren L. Palmer, Palmer, No. 09-cv-00076 (D. Idaho June 17, 2010).

CHAPTER SEVEN

1. Matthew Stoff, Daily Sentinel Interview with George Hudgins, The Daily Sentinel, May 30, 2009.

2. United States v. Hudgins, No. 08-cr-00027 (E.D. Tex. Mar. 31, 2009) (Judgment in a Criminal Case).

3. Id.; CFTC v. Hudgins, No. 08–00187 (E.D. Tex. 2009) (Consent Final Order of Permanent Injunction, Civil Monetary Penalty and other Equitable Relief).

4. Id.

5. Stoff, supra note i.

6. Id.

7. Matthew Stoff, Inside the Mind of George Hudgins, The Daily Sentinel, May 30, 2009; Stoff, supra note i.

8. Stoff, supra note i.

9. See id.; Consent Order, supra note iii, p. 16.

10. Consent Order, supra note iii, p. 14.

11. Id.

12. Id. p.15.

13. Complaint for Permanent Injunction, Civil Monetary Penalties, and Other Equitable Relief p. 20, CFTC v. Hudgins, No. 08-cv-00187 (E.D. Tex. May 13, 2008).

14. Id. pp. 24–27.

15. Stoff, supra note i.

16. Initial Report of the Receiver at 11–12, Hudgins, No. 08-cv-00187 (E.D. Tex. July 8, 2008).

17. Consent Order, supra note iii, p. 22; Information at 3, Hudgins, No. 08-cr-00027 (E.D. Tex. July 21, 2008).

18. Consent Order, supra note iii, pp. 24–26.

19. Id. p. 24; Stoff, supra note i.

20. Complaint, supra note xiii, p. 35.

21. Stoff, supra note 1.

22. Consent Order, supra note iii, pp. 2(c), 26.

23. Initial Report of the Receiver, supra note xvi, at 2–11; Second Report of the Receiver at 5, Hudgins, No. 08-cv-00187 (E.D. Tex. Sept. 3, 2008).

24. Fifth Report of the Receiver at 3, Hudgins, No. 08-cv-00187 (E.D. Tex. May 11, 2009).

25. Stoff, supra note i.

CHAPTER EIGHT

1. SEC v. Forte, No. 09-cv-00063 (E.D. Pa. Mar. 16, 2010) (Order). (Consolidated with CFTC v. Forte, No. 09-cv-00064 (E.D. Pa. Jan. 8, 2009)).

2. CFTC v. Forte, No. 09–00064 (E.D. Pa. Sept. 30, 2009) (Consent Order of Permanent Injunction and Other Equitable Relief against Defendant Joseph S. Forte p.9).

3. Second Report of Marion A. Hecht, Court-Appointed Receiver for Joseph S. Forte and Joseph Forte, L.P. at 1, Ex.2, Forte, No. 09-cv-00064 (E.D. Pa. Mar. 1, 2010).

4. Consent Order, supra note ii, at 4–5.

5. Complaint for Permanent Injunction, Civil Monetary Penalties, and Other Equitable Relief pp. 15–16, Forte, No. 09-cv-00064 (E.D. Pa. Jan. 7, 2009).

6. Consent Order, supra note ii, at 5.

7. Second Report of Receiver, supra note iii, at 1.

8. Consent Order, supra note ii, at 7.

9. Id.

10. Id. at 8.

11. Second Report of Receiver, supra note iii, at 11–16.

12. Consent Order, supra note ii, at 7.

13. Second Report of Receiver, supra note iii, at 1.

14. Second Report of Receiver, supra note iii., at 10, 22–14.

15. Press Release, FBI - Philadelphia Division, U.S. Department of Justice, Delaware County Man Sentenced to 15 Years for Multi-Million Dollar Investment Scheme (Nov. 14, 2009).

16. On September 30, 2009, the U.S. District Court for the Eastern District of Pennsylvania entered a consent order of permanent injunction against Forte barring him from trading commodity futures and options contracts and CFTC-regulated foreign currency contracts, and prohibiting him from soliciting funds for such trading, registering with the CFTC and acting as a principal, agent or employee of a CFTC registrant. The order also requires payment of restitution to defrauded pool participants and a civil monetary penalty the specific amounts of which will ultimately be determined in the near future by the court-appointed Receiver. Consent Order, supra note ii.

CHAPTER NINE

1. Indictment p. 6, United States v. Healy, No. 09-cr-0319 (M.D. Pa. Oct. 9, 2009)

2. Gus Garcia-Roberts, Moron of the Week: Self-Destructive Ponzi Baller Sean Healy, Miami NewTimes Blog, October 30, 2009.

3. Indictment, supra note i, pp. 1, 3, 6.

4. Id. pp. 4–5.

5. Id. p.8.

6. Id. pp. 7–8

7. Complaint for Injunctive and other Equitable Relief and for Civil Monetary Penalties under the Commodity Exchange Act p.22, CFTC v. Healy, No. 09-cv-01331 (M.D. Pa. July 12, 2009).

8. Indictment, supra note i, pp. 9, 18.

9. Id. p. 6–7.

10. Receiver’s Initial Report at 5, 9, Healy, No. 09-cv-01331 (M.D. Pa. July 30, 2009).

11. Id. at 18–22.

12. Id. at 17.

13. Id. at 11–12.

14. Id. Inventory at 1–10.

15. Id. Inventory at 13–15.

16. Complaint, supra note vii, p. 34; Receiver’s Third Report at 4, Healy, No. 09–01331 (M.D. Pa. Apr. 15, 2010).

17. Indictment, supra note i, p. 8.

18. Id. p. 11.

19. Id. p. 12.

20. Id. p. 14.

21. Id. p. 15.

22. Press Release, U.S. Department of Justice, Florida Man Indicted in $20 Million Ponzi Scheme That Targeted Pennsylvania Investors, October 15, 2009.

23. Arrest Warrant, attach. Report of Bail Violations, Healy, No. 09-cr-00319 (M.D. Pa. Dec.18, 2009).

24. Healy, No. 09-cr-00319 (M.D. Pa. Jan. 7, 2010) (Order).

25. Healy, No. 09-cr-00319 (M.D. Pa. Apr. 1, 2010) (Judgment in a Criminal Case).

26. Notice of Appeal to U.S. Court of Appeals, Third Circuit, United States v. Healy, No. 10–2095 (3rd Cir. Apr. 12, 2010).

27. Healy, No. 09-cv-01331 (M.D. Pa. June 22, 2010) (Consent Order of Permanent Injunction).

28. Memorandum and Order of Judge Christopher Connor, United Sates District Court for the Middle District of Pennsylvania, 1:09-CV-1331 (April 26, 2011).

CHAPTER TEN

1. Obituary, Ryan Duane Puckett, Charlotte Observer, June 24–25, 2009.

2. Appendix to Memorandum in Support of Plaintiff’s Motion for a Statutory Restraining Order Ex. 3: Declaration p. 6, CFTC v. Barki, LLC, 09-cv-00106 (W.D. N.C. Mar. 17, 2009).

3. App. to Pl.’s Mem., supra note ii, at Ex. 1: Decl. pp. 8–10, 13.

4. Id. pp. 2–6, 10.

5. Id. pp. 13–15.

6. Id. pp. 17–23, Ex. 5: Decl. pp. 20–25.

7. App. to Pl.’s Mem. supra note ii, Ex. 1: Decl. p. 24.

8. Complaint for Injunctive Relief, Civil Monetary Penalties, and Other Equitable Relief, CFTC v. Barki, LLC, No. 09-cv-00106 (W.D. N.C. Mar. 17, 2009); Barki, LLC, No. 09-cv-00106 (W.D. N.C. Mar. 17, 2009) (Order Granting Plaintiff’s Motion for Statutory Restraining Order).

9. Complaint, supra note viii, pp. 1, 23–28.

10. Id., pp. 33–37, 40–41.

11. Answer of Relief Defendant Rhonda Kramer, Barki, LLC, No. 09-cv-00106 (W.D. N.C. May 6, 2009); App. to Pl.’s Mem. supra note ii, Ex. 1: Decl. p.16, Ex. 3: Decl. p.15.

12. App. to Pl.’s Mem. supra note ii, Ex. 3: Decl. pp. 3–13.

13. App. to Pl.’s Mem. supra note ii, Ex. 2: Decl. pp. 4–6.

14. Id. pp. 8–9.

15. Receiver’s First Report at 7–8, Barki, LLC, No. 09–00106 (W.D. N.C. May 18, 2009).

16. Barki, LLC Receivership Information, http://www.gnerlaw.com/Barki.

17. Receiver’s Motion for Approval of Settlement pp. 11–15, Barki, LLC, No. 09-cv-00106 (W.D. N.C. May 10, 2010).

INVESTORS’ BILL OF RIGHTS