Category: Fraud

Randy King, his son Matthew King, and Andrea Trout founded and ran The Legacy Group, Inc. a real estate investment firm based in Colorado Springs. The firm’s business model was to provide mezzanine loans to real estate projects. These Legacy mezzanine loans would be junior to the secured mortgage loans on the project.  Legacy raised … Read more »

Knight Nguyen Investments raised millions from its retail investor clients to invest in securities that met the firm’s investment criteria:  (a) always allocate “secured” capital to attract at least 10% returns, and would select entities  (b) with taxable income to support returns and that often do over $10 million of revenue;   (c) that are … Read more »

Peter Quartararo met with potential investors and told them that he had access to “pre-IPO” stock in Peloton, WeWork, and Airbnb.   The first potential investor was an acquaintance that had done a favor for Mr. Quartararo. He offered to let the investor buy the shares in WeWork and AirBnB at his cost, with was less … Read more »

Zach Horwitz was struggling actor using the stage name “Zach Avery.” His IMDB entry lists him in minor parts in mostly bad movies. His biggest movie role is an uncredited part as a medic in Brad Pitt’s “Fury.”  Mr. Horowitz couldn’t figure out how to get rich and famous, but he did hatch a plan … Read more »

I think many frauds start with a failure to recognize mistakes. Yes, it’s hard to tell your investors that you lost some of their money. It makes it harder to attract new investors and additional investments. It gets really hard to do that when you go to jail. Martin Silver was the co-founder, managing partner, … Read more »

Lots of private equity funds use a line of credit to fund acquisitions. It’s quicker to draw on the line than to call equity from investors. That line of credit is secured by the capital commitments to the private equity fund. Later the private equity fund calls the capital for the acquisition and pays down … Read more »

George Heckler, of Charleston, South Carolina, operated a decade-long fraud through three private hedge funds, Cassatt Short Term Trading Fund LP (Cassatt), CV Special Opportunity Fund LP (CV Special), and Conestoga Holdings LP (Conestoga). This fraud caught my attention because my brother and mom both live in South Carolina. Heckler’s initial fund was Conestoga, which … Read more »

Joseph Cimino wanted to make a great tequila and needed capital to make it happen. He raised almost $1 million and got 6 Degree tequila into production. Unfortunately, he apparently lied to his investors in raising the capital and then stole almost half of that capital. Cimino created a 40-page booklet providing sales and expense … Read more »

COVID vaccinations are continuing to roll out and we can hope to see an end to the pandemic. Regulators are continuing to roll out cases against people and companies that tried to illegally profit from the pandemic. The latest case is against Arrayit Corporation, a life sciences company in Sunnyvale, California. Although a public company, … Read more »

Viktor Gjonaj thought he had figured out a way to make money. He was a commercial real estate broker and convinced members of his Albanian-American community in Detroit that he had lucrative real estate investment opportunities. He raised over $26 million. Gjonaj had a promising plan. It involved lottery tickets instead of real estate. Gjonaj … Read more »