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Tag: Michael Derrick Peninger

  • U.S. Marshals, FBI, Police Capture Ponzi Figure Who Ducked Sentencing; Michael Derrick Peninger Returned To Jail Amid Reports He Cut Transmitter On Electronic Monitoring Device

    Michael Derrick Peninger was captured yesterday, nine days after he failed to show up for sentencing court in a South Carolina Ponzi scheme case.

    Authorities said he cut the transmitter on an electronic monitoring device he was ordered to wear prior to fleeing April 12. A federal magistrate judge jailed Peninger yesterday after he was arrested on a warrant issued by the federal judge in Charleston presiding over the Ponzi case.

    Peninger, 50, was convicted in October of eight counts of mail fraud and one count of making a false statement to an FBI agent. Though jailed briefly after the conviction, Peninger was freed pending sentencing after his 72-year-old mother appealed to U.S. District Judge P. Michael Duffy to permit her son to leave jail to assist with the care of her husband, who has Alzheimer’s disease.

    Duffy structured a release by which Peninger would wear an ankle monitor and submit to supervision pending sentencing. The sentencing date was set for April 12, and Peninger did not show up in court. He faced a maximum penalty of nearly two decades in prison, and prosecutors unsuccessfully argued last fall against the release.

    The U.S. Marshal’s Service “developed information that Peninger was on Daniel Island” yesterday, the agency said.

    Daniel Island is within the borders of Charleston and is the home of Peninger’s mother, although it was not immediately clear if Peninger — who had been living with his mother since his release last year — was attempting to return to her home.

    Deputy U.S. Marshals, Charleston City Police Officers and FBI Agents immediately responded to the Daniel Island area, the U.S. Marshals Service said.

    “K-9 officers tracked Peninger into a wooded area and followed his trail into the business district where Peninger was spotted walking in the 300 block of Seven Farms Drive and taken into custody,” the agency said.

    Peninger was captured as a result of teamwork, the agency said.

    “We appreciate the support from our fellow law enforcement community in apprehending Peninger,” said U.S. Marshal Kelvin Washington. “[H]e will now face the courts for his original sentence to be imposed.”

    Peninger may face more jail time for ducking sentencing court and faces the prospect of a contempt-of-court hearing.

    Prosecutors again argued yesterday that Peninger was a flight risk, and the magistrate judge jailed him.

    Just days prior to Peninger going on the lam, the CFTC obtained a judgment of more than $3.9 million against him in a civil fraud case brought in 2008.

  • Ponzi Guilty Pleas In New York, Tennessee; New Ponzi Case Filed By CFTC In Florida; Relief Defendant Misspelled Its Own Company Name

    EDITOR’S NOTE: There was significant action in Ponzi cases today. Earlier we reported on the guilty plea of Trevor Cook in Minnesota and the issuance of a bench warrant in South Carolina for Michael Derrick Peninger. The brief below summarizes action in the Ponzi and affinity-fraud case case of Steven Byers in New York, the Ponzi case of Barron A. Mathis in Tennessee, and new allegations of a Forex Ponzi scheme against Claudio Aliaga in Florida.

    New York: Steven Byers, 47, of Oak Brook, Ill., pleaded guilty today to felony counts of conspiracy and wire fraud in a Ponzi case said to involve $255 million. U.S. District Judge Denny Chin, who sentenced Bernard Madoff to 150 years in prison, is the presiding judge in the case. Byers will be sentenced in September. He faces a maximum of 25 years in prison.

    Byers was the former president and chief executive officer WexTrust Capital LLC, a private-equity firm. Orthodox Jews were targeted in the scheme, which involved real estate and specialty finance.

    “From at least 2003, Byers and others raised money from investors pursuant to private placement offerings and then used material amounts of that money for other purposes, and did not disclose their diversion of funds to investors,” prosecutors said. “In one such private placement, Byers and others raised approximately $9.2 million in investor funds by representing that the funds would be used to purchase and operate seven commercial properties that were leased to the United States General Services Administration (GSA).

    “According to the GSA private placement memorandum issued to investors by WexTrust Capital,” prosecutors said, “the $9.2 million raised from investors, together with a mortgage of approximately $21 million, would be used to purchase the seven GSA properties and cover related acquisition expenses.

    “The seven GSA properties, however, were never purchased. Instead, virtually all of the funds raised from investors to purchase the properties were diverted by Byers and others to other purposes, but investors were never informed that the funds were used for any purpose other than to purchase and operate the seven GSA properties. Byers and others later agreed to make up a story that they would then tell the GSA investors regarding what happened to their investment,” prosecutors said.

    The guilty plea was entered as a result of a plea deal with prosecutors. Byers “agreed to forfeit $9.2 million and is subject to mandatory restitution and faces criminal fines up to twice the gross gain or loss derived from the offense,” prosecutors said.

    Tennessee: In Nashville, Barron A. Mathis, 29, pleaded guilty to wire fraud. He formerly was vice president and portfolio manager for J.C. Reed & Co., a failed financial services company headquartered in Franklin.

    Mathis sold his Ponzi and fraud scheme to friends, acquaintances and clients, collecting $11 million in the process, prosecutors said. Most of the investors were elderly, inexperienced traders.

    “Cases like these are egregious examples of predators who target vulnerable and innocent victims through false and fraudulent business practices,” said U. S. Attorney Edward M. Yarbrough. “By his own admission, Mathis encouraged people to invest by falsely promising security, growth and inflated returns on their money, but instead the investors lost their savings as part of an elaborate fraud scheme.”

    U.S. District Judge Robert L. Echols will sentence Mathis. A sentencing date has not been set.

    Florida: Claudio Aliaga, of Davie, has been charged civilly by the CFTC with operating a commodity-pool and Forex Ponzi scheme that gathered $4.5 million.

    Also charged was Aliaga’s company, CMA Capital Management LLC of Miami Lakes.

    Named relief defendants were Aliaga’s wife, Betty Aliaga, and a company known as CMA Global Investement (sic) Fund LLC. The CFTC noted that the company misspelled its own name and “received funds as a result of defendants’ fraudulent conduct.”

    U.S. District Judge Marcia G. Cooke ordered an asset freeze.

  • Federal Judge Dispatches U.S. Marshals To Arrest Convicted Ponzi Schemer; Michael Derrick Peninger Did Not Show Up At Sentencing Court In South Carolina

    UPDATED 5:45 P.M. EDT (U.S.A.) A federal judge has issued a bench warrant for Michael Derrick Peninger after Peninger did not show up for sentencing yesterday in a $7 million, Ponzi-scheme case in South Carolina.

    Peninger, 50, of Charleston, was convicted in October of eight counts of mail fraud and one count of making a false statement to an FBI agent, the CFTC said.

    The Post and Courier newspaper of Charleston is reporting that prosecutors argued last fall that Peninger should have been kept in jail upon conviction because he posed a flight risk.

    Peninger was released until his sentencing date after his 72-year-old mother appealed to U.S. District Judge P. Michael Duffy to permit her son to leave jail to assist with the care of her husband, who has Alzheimer’s disease.

    Duffy permitted Peninger to assist his mother and stepfather, ordering him to wear an ankle monitor. The judge now has dispatched the U.S. Marshals Service to locate and arrest Peninger, the Post and Courier is reporting.

    Just days ago a judgment of more than $3.9 million was placed against Peninger in a fraud case brought by the CFTC in 2008. The judgment was ordered by U.S. District Judge C. Weston Houck.

    Peninger was charged criminally in January 2009. Prosecutors said he operated three companies: Cooper River Group Inc., CSA Trading Group Inc., and Daniel Island Builders LLC.

    “[A]t least 20 investors provided Peninger and others with funds to invest on their behalf, but . . . Peninger and others misappropriated the money to pay personal expenses, to pay employees, to fund unauthorized business ventures, and to pay previous investors in a manner akin to a Ponzi scheme,” prosecutors said.

    Peninger faced a maximum penalty of nearly two decades in prison.

    South Carolina has had some unusual Ponzi cases, including the curious case of the “3 Hebrew Boys.”

    In that case, convicted Ponzi schemer Joseph B. Brunson of Hopkins declared himself “sovereign” and therefore immune from U.S. law. The claim was reminiscent of claims made by Curtis Richmond, a mainstay, pro se litigant in the AdSurfDaily Ponzi scheme case.

    In the 3 Hebrew Boys case, Brunson declared that former U.S. Attorney Walt Wilkens was guilty of treason, insurrection and conspiracy to overthrow the U.S. government in his successful efforts to prosecute Brunson.

    Richmond argued in the ASD case that U.S. District Judge Rosemary Collyer was guilty of treason.