Investment Scam: Ex-MRI International CEO Convicted in $1.5B Ponzi Scam, Receiver Says Aequitas Capital Management Was Involved in $617M Fraud, and Texas-Based AriseBank CEO Is Accused in $4M Cryptocurrency Fraud

Former MRI International Head is Found Guilty in $1.5B Ponzi Scam

Edwin Fujinaga, the ex-CEO of medical billings collections company MRI International, has been convicted of multiple counts of wire fraud, mail fraud, and money laundering. He is scheduled to be sentenced earlier this year.

According to the release issued by the US Attorney’s Office for the District of Nevada, Fujinaga and two other MRI executives were indicted in 2013 and were accused of fraudulently soliciting investments from over 10,000 residents in Japan, who wired their money to the US into bank accounts that he controlled. Fujinaga told investors that their funds would go toward buying medical claims only.

Instead, he used new investors’ money to pay earlier investors. Investors’ funds also were used to pay for unauthorized business expenses and cover Fujinaga’s own expenses, including a Las Vegas mansion at a golf resort, a private jet, real estate in Beverly Hills, Hawaii, and elsewhere, as well as luxury vehicles.

In 2015, a US district court judge ordered Fujinaga and MRI to pay over $580M as part of the final judgment in the US Securities and Exchange Commission’s civil case against them.

Receiver Says There is Enough Evidence of a $617M Ponzi-Like Scam By Aequitas

Ronald Greenspan, a court-appointed receiver, has issued a 174-page report in which he maintains that there is enough evidence of “actual fraud and badges of fraud” to show that Aequitas Management LLC conducted a $618M Ponzi scam, which is to date considered the largest to take place out of Oregon.

Greenspan’s report comes nearly three years after the Securities and Exchange Commission sued Aequitas, a number of affiliates, and three executives in 2016 for allegedly operating a $350M Ponzi fraud that bilked over 1500 investors. The regulator accused the defendants of selling promissory notes to pay earlier investors after Corinthian Colleges, and education provider defaulted on its duties to Aequitas Commercial Finance. Meantime, even as company executives knew they were improperly using investors’ money, they allegedly continued to bring in new investors while getting paid big salaries. Investors thought their money was going into a portfolio that included various types of trade receivables. Instead, 75% of the receivables came from Corinthian, which sold student loan receivable pools to an Aequitas Commercial Finance subsidiary and was supposed to repurchase any delinquent loans. The for-profit education provider, however, started to default on payments owed in 2014, and in 2015 filed for bankruptcy protection amid allegations by federal regulators that it misled students regarding job placement rates.

Now, Greenspan contends that the Ponzi scam was much larger than previously thought. Investors, meantime, have filed securities fraud claims seeking to recover their losses.

AriseBank CEO Arrested for Cryptocurrency Fraud

Jared Rice, the Dallas-based CEO of AriseBank, has been arrested and charged with wire fraud and securities fraud. According to federal prosecutors in Texas, Rice defrauded hundreds of investors in a more than $4M cryptocurrency fraud scheme.

Rice is accused of lying to prospective investors by telling them that AriseBank could provide not just cryptocurrency services, but also “FDIC-insured accounts and traditional banking services,” including debit and credit cards affiliated with Visa. He touted AriseBank as the “first decentralized bank platform,” marketed a proprietary digital concurrency called AriseCoin, and allegedly made false claims about a $600M Initial Coin Offering. Investors went on to purchase AriseCoin using various digital currencies.

In truth, contended prosecutors, AriseBank was not authorized to engage in any type of banking in Texas, had no Visa-related partnership, and was not insured by the FDIC. Meantime, Rice allegedly took investor money and used their funds on his own personal expenses.

Earlier this year, the SEC had stopped the allegedly fraudulent ICO in which AriseBank co-founders Stanley Ford and Ford were accused of offering and selling unregistered investments in AriseCoin.

For years, Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) has helped thousands of investors to recover. Contact our securities law firm today. SSEK Law Firm represents investors in Texas and throughout the US.

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