BREAKING NEWS: ‘Billionaire Boys Club’ Attorney In Michigan Ponzi Scheme Case Indicted In North Carolina For Running His Own Securities Scheme

ponzinewsUPDATED 7:02 P.M. ET (U.S.A.) A Georgia attorney representing defendants in the alleged “Billionaire Boys Club” Ponzi scheme in Michigan has been indicted in North Carolina on charges he ran his own securities-fraud scheme.

Gregory Bartko, 56, of Berkeley Lake, Ga., was indicted in North Carolina under seal Nov 4, according to U.S. Attorney George E.B. Holding of the Eastern District of North Carolina. The seal was lifted Nov. 18.

Bartko and a co-defendant were charged with three counts of mail fraud and two counts of making false statements. Prosecutors said the scheme also involved conspiring to commit mail fraud, laundering monetary instruments, engaging in unlawful monetary transactions, making false statements and obstructing proceedings of the United States Securities and Exchange Commission (SEC).

Bartko is representing “Billionaire Boys Club” (BBC) defendants John J. Bravata, Shari Bravata and Antonio Bravata against civil charges in a case brought by the SEC in Detroit. The SEC said that as many as 400 investors were fleeced in a $50 million Ponzi scheme operated by John Bravata and a co-defendant, alleging the scheme paid for “expensive lifestyles” and “luxury homes, watercraft, jewelry, gambling, exotic vacations and expensive cars.”

“Indeed, John Bravata used money from the first two investors to buy himself a $90,268 Ferrari,” the SEC said. “John Bravata and [co-defendant Richard] Trabulsy spent at least $7 million of the investors’ money for their own benefit, and for the benefit of John Bravata’s wife, Shari A. Bravata, and son, Antonio Bravata.”

The 2009 Michigan case became known as the “Billionaires Boys Club” prosecution because a Bravata company was named “BBC Equities,” and the SEC asserted in July 2009 that BBC was intended to stand for “Billionaire Boys Club.”

A California Ponzi scheme in the 1980s also was known as “The Billionaire Boys Club.”

Despite the indictment against him in North Carolina, Bartko advised U.S. District Judge David M. Lawson of the Eastern District of Michigan that he intends to proceed as the attorney for the Bravata family members without objection from his clients.

In North Carolina, prosecutors said Bartko operated a “criminal investment fraud scheme” and “held himself out as an investment banker” to carry out the scheme.

Darryl Lynn Laws, Bartko’s co-defendant in the North Carolina case, posed as a “Ph.D. in finance” for his role in carrying out the scheme, prosecutors said. Laws, 58, lives in La Jolla, Calif.

“Bartko and Laws used bank accounts controlled by Bartko in Georgia to collect hundreds of thousands of dollars in proceeds from fraudulent sales of investments,” prosecutors said. “[N]early all of the money collected by Bartko and Laws as part of the scheme had been obtained by a single salesman, [Scott Bradley Hollenbeck].

“In making these sales, Hollenbeck used numerous materially false statements and omissions, including false promises to investors designed to conceal the true risk of the investment, such as ‘guarantees’ of yearly earnings of at least 12%, and the promise that the investment was insured when it was not,” prosecutors said.

Hollenbeck is named an unindicted co-conspirator in the North Carolina case.

Read the “Billionaire Boys Club” complaint by the SEC. Bartko is representing three defendants in the BBC case.

Read a statement by U.S. Attorney George E.B. Holding announcing the indictment against Bartko in North Carolina.

The United States Postal Inspection Service, the FBI and the IRS Criminal Investigation Unit are doing the legwork in the North Carolina case, prosecutors said.

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5 Responses to “BREAKING NEWS: ‘Billionaire Boys Club’ Attorney In Michigan Ponzi Scheme Case Indicted In North Carolina For Running His Own Securities Scheme”

  1. I thought this was a reference to the 1984 ‘Billionaire Boys Club’ that involved murder as well as investment schemes

    http://en.wikipedia.org/wiki/Billionaire_Boys_Club

    Were these people also involved in that?

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  2. Hi Whip,

    Whip: I thought this was a reference to the 1984 ‘Billionaire Boys Club’ that involved murder as well as investment schemes

    http://en.wikipedia.org/wiki/Billionaire_Boys_Club

    Were these people also involved in that?

    No. The name of Jon Bravata’s company is BBC Equities, and the SEC asserted in July 2009 that BBC was intended to stand for “Billionaire Boys Club.”

    The case became known in Michigan as the “Billionaire Boys Club” case.

    Regards,

    Patrick

      (Quote)

  3. Thanks Patrick,

    Interesting, I didn’t bother to read the SEC compliant since I rely on your ‘cliff notes’ version of the important points.

      (Quote)

  4. Hi Whip,

    I added a graf to the story above the explain the “Billionaire Boys Club” reference.

    Thanks for your note.

    Patrick

      (Quote)

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