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Tag: Pennsylvania Ponzi schemes

  • Philly Affinity Fraudster Traded On Coca-Cola’s Name And Ran Ponzi, Feds Say

    ponzinews1EDITOR’S NOTE: Affinity fraud takes many forms. The case against Constant Damas appears to have been one that married an appeal to a common nationality to an appeal to the taste buds and brand recognition. Scammers often trade on the names of famous companies and individuals. And they often issue appeals to people of common ancestry or background.

    UPDATED 8:56 P.M. EDT U.S.A. A 45-year-old Philadelphia man who worked as an account manager at Coca-Cola Co. used his famous employer’s name to dupe people into investing in his Ponzi scheme, the office of U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania said.

    Constant Damas swindled more than $1 million from at least 20 people over a period of five years, federal prosecutors said.

    Damas is a native of Haiti and targeted the Haitian community, including family members and friends, prosecutors said.

    He has pleaded guilty to two counts of wire fraud. From a statement by prosecutors (italics added):

    Between 2007 through the end of 2012, Damas, who was an account manager at Coca-Cola Company, misrepresented to various individuals, including family members and friends in his Haitian community, that he was an investment manager at Coca-Cola.  He told his victims that, through this position, he could invest their money in Coca-Cola’s investment opportunities.  In fact, Damas did not hold this position and no such opportunities existed.  To entice his victims, Damas often made the following false representations to them:  he would collect a sum of money from the victims as their “principle” investment; the victims would receive an interest payment of a certain amount every month; and they could receive their principle payment upon request.  Damas, however, did not return the full “principle” investment amount back to his victims, and many of the victims did not receive any of their funds back or any interest payments.  Upon his arrest in February 2013, Damas admitted to federal agents that this was a “scam business.”

    Damas is scheduled to be sentenced Sept. 30. He potentially faces decades in federal prison.

  • DEVELOPING STORY: Pipe Bombs Reportedly Found In Pennsylvania Storage Unit Rented In Name Of Man Arrested In Ponzi Scheme Case

    americaatrisk4DEVELOPING STORY: It is early and facts remain unclear. What’s known, according to local news reports, is that the FBI notified local police in the area of Chester County in southeastern Pennsylvania that agents would be operating in the region.

    Late yesterday  — sometime after 11 p.m. while some residents were sleeping — explosions were heard in the area of Valley Creek Park. The explosions appear to have been controlled detonations by law enforcement, which earlier had found dozens of pipe bombs in a storage unit near the town of Malvern. Members of bomb squads were seen in the area.

    The storage unit was rented in the name of Istvan Merchenthaler, an accused Ponzi schemer.

    From Malvern Patch (italics added):

    Around 8:30 p.m., bomb squads from Montgomery County and Philadelphia began hauling the explosives from the storage facility to nearby Valley Creek Park. The explosives were transported inside large metal containers on trailers, and each trip involved a convoy of fire engines, ambulances and police vehicles.

    From Chester County Daily Local News (italics added):

    The source, who asked to remain anonymous due to the ongoing and sensitive nature of the investigation, said that the storage locker was registered to 42-year-old Istvan [Merchenthaler], a Chester County man facing federal charges in connection to a Ponzi scheme that officials say defrauded investors of about $2 million over the past seven years.

    Officials close to [Merchenthaler]’s case said the suspect was connected to similar explosive investigations in other states, and added that he is facing charges in multiple jurisdictions throughout the east coast.

  • FEDS: Istvan Merchenthaler Charged In Alleged ‘Prepaid Phone Cards’ Ponzi Scheme That Stole More Than $2 Million From Investors

    EDITOR’S NOTE: If you’re keeping a “Bubba Blue” notebook on how to have your Ponzi scheme, this alleged caper in Greater Philadelphia involving prepaid phone cards and purported ties to major retailers perhaps merits an entry . . .

    A 42-year-old Pennsylvania man has been charged in an alleged “prepaid phone cards” Ponzi scheme that operated for more than five years and bilked more than 200 investors out of more than $2 million.

    Istvan Merchenthaler of Downingtown was indicted on four counts of wire fraud, one count of aggravated identity theft and two counts of money laundering, the office of U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania said.

    Merchenthaler also is known as Steve Merchenthaler, prosecutor said, alleging that the scheme operated “at least” between May 2006 and September 2011.

    The long-running scam involved a business known as PhoneCard USA of which Merchenthaler claimed to be the founder, prosecutors said.

    They described the scheme as one that duped investors by trading on fancy terms such as “exponential growth,” defining the market as a wide geographic expanse and fabricating ties to famous businesses to keep the Ponzi wheel greased.

    Merchenthaler positioned PhoneCard USA as a “premier distribution source” for phone cards and cell phones, claiming to have contracts with Walmart, 7-Eleven and BJ’s Wholesale Club, prosecutors said.

    It is common for scammers to purport to have ties to famous business entities — and that proved to be the case with Merchenthaler and his PhoneCard USA pitch, prosecutors said.

    “In reality, Merchenthaler had no such contracts with these major retail chain stores,” prosecutors said.

    Investors were drawn into the Ponzi morass in part through claims that the firm’s “lucrative contracts” with vendors covered “territories that span the east coast,” prosecutors said.

    “Merchenthaler claimed that these investments would finance the ‘exponential growth’ of PhoneCard USA and would provide investors with ‘generous returns’ on their investments,” prosecutors said.

    An investigation demonstrated that “Merchenthaler operated a ‘Ponzi’ scheme, stealing over $2 million from over 200 investors and using much of these funds for his own benefit and to perpetuate his scheme,” prosecutors said.

    The FBI and IRS led the probe.

  • URGENT >> BULLETIN >> MOVING: Ponzi Schemer And Recidivist Felon Robert Stinson Jr. Sentenced To More Than 33 Years For ‘Life’s Good’ Caper

    URGENT >> BULLETIN >> MOVING: Robert Stinson Jr., the Philadelphia-area Ponzi schemer who was wiring stolen funds from one account to another even as the FBI was conducting a raid in 2010, has been sentenced to 400 months in federal prison. The term amounts to more than 33 years.

    Stinson, a 57-year-old securities huckster and recidivist felon whose criminal record dates back at least to 1986, defrauded more than 260 investors out of more than $17 million in his most recent scam, federal prosecutors said.

    The scam operated through an entity known as Life’s Good Inc.  and featured false claims that Stinson was a graduate of the Massachusetts Institute of Technology and a fabulously successful businessman.

    In reality, he was a serial huckster who’d twice filed for bankruptcy and was enjoined in a 1990 SEC case from breaking federal securities laws.

    At 12:06 p.m. on June 29, 2010 — the date of the raid and while federal agents were executing search warrants and seizing two Mercedes Benz sedans Stinson had purchased with money stolen from investors — Stinson began a series of wire transactions in which he moved at least $225,000 to prevent the cash from being seized, according to the indictment.

    Two of the transactions occurred during the same minute and involved two separate banks, according to the indictment.

    Stinson’s wife, Susan L. Stinson, is scheduled to be sentenced tomorrow on charges of obstructing the SEC’s 2010 investigation into her husband.

    U.S. District Judge Michael M. Baylson of the Eastern District of Pennsylvania presided over Robert Stinson’s sentencing today. In addition to ordering Stinson jailed for decades, Baylson ordered restitution of $14 million and three years’ supervised release when Stinson leaves jail.

    Stinson will be close to the age of 90 if he survives the term of incarceration.

    Court filings suggest Stinson tried to defeat a court-ordered asset freeze and continued to commit fraud even after the actions by the FBI and SEC in 2010.

    The Philadelphia Daily News is reporting tonight that Stinson told the judge today that he’d “changed” while awaiting sentencing and had dedicated his life to serving God.

  • Federal Agents Arrest 77-Year-Old Pennsylvania Attorney Amid Swirl Of Ponzi Allegations; Anthony Lupas Charged With Mail Fraud; U.S. Secret Service, IRS Spearhead Probe

    Federal agents at the scene of the emerging Anthony Lupas case in Wilkes-Barre, Pa. Source: YouTube.

    Another major Ponzi case appears to be brewing — this one in Pennsylvania, where federal agents were seen carting boxes from the Wilkes-Barre office of attorney Anthony Lupas.

    Lupas, the former solicitor of the Wilkes-Barre School District, is 77. He now joins a number of alleged swindlers over the age of 65 implicated in fraud schemes nationwide involving millions of dollars.

    The office of U.S. Attorney Peter J. Smith of the Middle District of Pennsylvania confirmed the arrest of Lupas, who was ordered at his first court appearance placed under “house arrest” with electronic monitoring, prosecutors said.

    Senior U.S. District Judge James M. Munley presided over the arraignment in Scranton. Lupas also was ordered to surrender his passport.

    Agents from the U.S. Secret Service and the IRS are conducting the probe.

    Read local coverage in the Citizens’ Voice.