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Ponzi Scams: DOJ Begins Paying Distributions to Madoff Victims, Real Estate Investment Scam Allegations Lead to Guilty Plea, and SEC Seeks to Shut Down $38M “Ad Packs” Scheme

DOJ Begins Distributing Payments to Bernie Madoff’s Victims

Nearly nine years after Bernie Madoff was arrested for running a multi-billion dollar Ponzi scam, the US Department Justice has begun to pay out distributions owed to his victims. The money comes from the Madoff Victim Fund, a $4B fund set up for settlements paid by JPMorgan Chase & Co. (JPM), which was the bank that the Ponzi mastermind used, and the estate of Jeffry Picower, who was one of Madoff’s longtime customers.

This fund will pay back over 24,000 victims some $772M during the first round of distributions. Another fund, which is supervised by bankruptcy court, has already paid out over $10B to investors. Investors who will be paid by from Madoff Victim Fund are those that did not qualify for recovery under the bankruptcy proceedings.

NY Woman Pleads Guilty to Running An Investment Scam

Alisa Adler has pleaded guilty to two counts of wire fraud. Adler is the ex-head of ASG Real Estate Services Group.

She admitted to collecting about $245K from two investors and using most of their money to pay back other investors and cover her own expenses. Now, she faces up to 20 years in prison and could be ordered to pay up to two times what investors lost.

Adler was indicted in 2016 over investor fraud allegations that she took approximately $740K from three investors, using a huge bulk of the funds for herself. The previous year, she was accused of running a Ponzi scam that was also a real estate investment scam from 2009 through 2011.

According to the US Attorney’s Office for the District of New Jersey, Adler told investors that their funds would go toward buying real estate projects.

SEC Gets Court Order to End “Ad Packs” Scam
The US Securities and Exchange Commission now has a court order to stop a $38M Ponzi Scam involving “ad packs.” According to the regulator, Pedro Fort Berbel and his Fort Marketing Group ran fraudulent online ad businesses that solicited investors. Berbel and his company are accused of touting investment returns of up to 120% to investors to get them to buy an ad pack and clicked on several banner ads daily. Over $38M was raised from at least 150,000K investors.

Now, the SEC is accusing Berbel and Fort Marketing Group of selling investments that were not registered with the regulator. The Commission also says that neither Berbel nor his company is registered to even sell investments. The court order freezes their assets.

According to the Commission’s enforcement case, 99% of the supposed profits made by earlier investors was from the buy-ins paid by earlier investors. Berbel, meantime, allegedly used millions of investors’ dollars to pay for business expenses, buy a luxury house, and charter private planes, among other expenses.

Please contact our securities fraud law firm if you think your investment losses may be a result of someone else’s negligent, careless, or wrongful actions. Shepherd Smith Edwards and Kantas, LTD LLP would like to offer you a free, no obligation case consultation.
Madoff Victims Get First Payments From Recovered $4 Billion, Bloomberg, November 9, 2017

New York woman admits running investment fraud scheme, The Olympian, November 29, 2017

Agency Obtains Court Order to Stop “Ad Packs” Ponzi Scheme, SEC, November 16, 2017

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UBS to Pay $3.5M Penalty To Settle Allegations that It Disadvantaged Retirement and Charity Accounts During Mutual Fund Transactions, Institutional Investor Securities Blog, November, 2017

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