FEDS: Man Bilked $10 Million In Ponzi Scheme That Traded On Name Of The Famous NASCAR Brand

ponziblotterEven as stock-car fans were celebrating the news that Indy-car driving star Danica Patrick would hopscotch circuits and participate in a limited number of events in NASCAR’s Nationwide Series next year, federal prosecutors were putting together a Ponzi scheme case against a man alleged to have obtained $10 million by using NASCAR’s name.

Eliott Jay Dresher, 63, of Chatsworth, Calif., was jailed yesterday in California after a federal judge ruled him a flight risk.

In a case put together by the FBI and the U.S. Postal Inspection Service, prosecutors said Dresher “solicited money from investors with promises that their money would be used to finance a business in which [he] purchased NASCAR apparel and sold the merchandise to ‘big box’ stores such as Costco.”

Dresher, however, “did not really operate such a business and all of the funds paid to investors were ‘Ponzi’ payments that came from the victims’ principal investments,” prosecutors said.

NASCAR races are among the most popular spectator sports in the world. Fans are extremely loyal to the brand. It was not immediately clear if investigators were viewing the case against Dresher as a form of affinity fraud or perhaps brand leeching.

Affinity fraud often is an element in Ponzi schemes, which frequently are targeted at specific groups of people, including members of a particular faith or ethnicity.

Brand leeching also is associated with Ponzi models. Such approaches may include claims a company is the “next Google” or the “next Microsoft,” for instance. In the alleged $100 million AdSurfDaily Ponzi scheme, prosecutors said the company tried to leech credibility by falsely claiming that its president, Andy Bowdoin, had received a special award from the White House for business acumen.

Investigators said the Dresher scheme using NASCAR’s name operated for about 10 years before collapsing in 2008.

About 50 participants invested a total of $10 million over the years, lulled by Dresher’s guarantee that they would receive returns “typically between 20 percent and 25 percent every six months,” prosecutors said.

The Dresher case has some of the hallmarks of Ponzi schemes under investigation in Minnesota and Illinois in which investors were told their money was being used to finance sales of goods that would be resold at a significant profit.

Minnesota businessman Tom Petters, 52, was convicted in a $3.65 billion Ponzi scheme earlier this month. Meanwhile, Gerard Frank Cellette Jr., 44, is jailed in the state amid allegations he fleeced $53 million in a Ponzi scheme involving bogus printing contracts.

In Illinois, Matthew Scott, 50, was accused of running a $28 million Ponzi scheme by assuring investors their funds would be used to purchase or finance the purchase of high-speed commercial printers that would be sold to third-party buyers at a profit.

The machines were said to be valued in excess of $100,000, and Scott claimed his mark-up of 20 percent led to big profits, the FBI said.

Scott, 50, of Elmhust, Ill., was charged with mail fraud. His Chicago-area company, Gelsco, neither purchased nor financed such printers, the FBI said.

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5 Responses to “FEDS: Man Bilked $10 Million In Ponzi Scheme That Traded On Name Of The Famous NASCAR Brand”

  1. When Kasey Kahne was driving for Ray Evernham a few years ago, I saw a NASCAR Ponzi posted on TalkGold and forwarded all the info to Evernham Motorsports via their website as cutout of Kahne was featured in the Ponzi’s ads and logo. I have no clue if this is related or if Evernham took any action but it would be nice if they had.

    Nice to see these go down rapidly or so it seems lately. Perhaps it’s just good reporting….

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  2. Hi d_b,

    dirty_bird: When Kasey Kahne was driving for Ray Evernham a few years ago, I saw a NASCAR Ponzi posted on TalkGold and forwarded all the info to Evernham Motorsports via their website as cutout of Kahne was featured in the Ponzi’s ads and logo. I have no clue if this is related or if Evernham took any action but it would be nice if they had.

    Thanks for the note. Your post reminded me that ASD promoters also were saying the company was going to sponsor a race car.

    Regards,

    Patrick

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  3. Quick note:

    Just remembered that ASD’s Bowdoin also used the name of the Miss America Organization in a conference call in September:

    http://patrickpretty.com/2009/09/26/editorial-google-the-white-house-and-miss-america/

    The U.S. Secret Service transcribed this call and brought it to the attention of a federal judge. The specific allegation prosecutors made in this September 2009 court filing was that Bowdoin was telling ASD members one story and a federal judge another.

    He told members the money the government seized belonged to them; he told the judge it belonged to him.

    http://patrickpretty.com/2009/09/28/breaking-news-prosecutors-go-back-to-court-provide-judge-copy-of-transcript-from-bowdoins-call-last-week/

    Patrick

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  4. On the discussion topic of race car purchases it should be remembered that the gang at Stormpay purchased a small track race car right before they collapsed along with 12DailyPro.

    ARWR

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