FBI: Genesis Acquisitions International part of a $50M Ponzi
A few weeks ago I wrote an article exposing Genesis Acquisitions International.
Shrouded in secrecy, much of what we learned of the scheme was through secret emails written by Ken Russo.
Russo, a serial participant in the some of the worst MLM scams ever to launch, lured investors via email with promises of 20% “guaranteed” ROIs in just a few weeks.
I am very firm in my belief that this is the real deal and I get no sense whatsoever that any kind of scam is intended here. It is very seldom that we can find an opportunity as transparent and viable as the Genesis Acquisitions International, LLC. investment club.
This is a wholesale purchase which is quickly turned over in order to produce the return (20%) to the members in a relatively short time frame.
Wary of Ponzi concerns, Russo reassured those he was soliciting that Genesis Acquisitions was no such scheme:
IMPORTANT NOTE REGARDING THE PONZI ISSUE
Those who are of the opinion that this might be another ponzi scheme should pay close attention to the next paragraph.
Upon completion of the first contract (PINEWOOD TCI 1) the members did not have the option of “rolling over” their funds.
Each and every member received their principal and interest to their bank account and this policy will remain in effect for all future contracts.
This demonstrates that Genesis Acquisitions International, LLC. is not a ponzi and that our funds are indeed placed into viable land sale transactions.
In a nutshell, Genesis Acquisitions International solicited tens of thousands of dollars worth of individual investments on the promise of 20% ROIs.
The scheme was headed up by William (Bill) Apostelos, and operated primarily through a “password-protected website”, email communications and NDA prohibiting investors from publicly advertising or discussing the scheme.
That didn’t stop the FBI from investigating Apostelos and his company though, with news today that the FBI have moved to freeze Apostelos’ known assets.
Not surprisingly, despite Ken Russo’s reassurances, Genesis Global Acquisitions is but the tip of William Apostelos’ $50M Ponzi empire.
William Apostelos accused of stealing ‘north of $50 million’ from Miami Valley investors including cops, doctors and businesses.
A local couple swindled “north of $50 million” from hundreds of Miami Valley investors in Ponzi-type financial pyramid schemes to fund an extravagant lifestyle that included buying racehorses and a $1 million farm in Clark County, according to federal court documents and the Federal Bureau of Investigation.
FBI Supervisory Senior Resident Agent Timothy Ferguson said the couple reside at the Tanglewood Drive residence in Springboro the FBI raided Wednesday morning.
According the FBI, a five-month investigation into Apostelos (right) revealed
more than 160 individuals from the greater Dayton area invested in the pyramid scheme, and that from November 2012 to May 2014, more than $32 million was deposited into accounts controlled by Apostelos and $28 million was transferred to prior investors.
William M. Apostelos, 53, and his wife Connie M. (Cooper) Apostelos robbed one family of more than $5 million and owes about $7 million to others through local seven Warren County court judgments, according to filings in United States Bankruptcy Court.
“I think the truly tragic part about it is there are going to be a lot of people in the Miami Valley who’ve been victimized and, in some circumstances, have lost everything,” said attorney Toby Henderson, who along with Robert Hanseman is representing creditors in Apostelos’ forced bankruptcy stemming from the allege pyramid scheme.
Investors in Genesis Acquisitions International were told Apostelos has been buying and selling real estate “for eleven years”, with the scheme “entering into an agreement” with one of Apostelos’ other companies, WMA Enterprises.
Of WMA Enterprises was little more than a shell company, one of many Apostelos used to run his Ponzi scheme;
The “shell” companies Apostelos used in the alleged scheme include Apostelos Enterprises Inc., Coleman Capital, Inc., Midwest Green Resources, LLC, WMA Enterprises, LLC, OVO Wealth Management, LLC and Silver Bridle Racing, LLC —many of which are housed at 35 Commercial Way in Springboro.
Despite the claims of legitimacy, what Apostelos did was simple. He took new investor funds and used it to pay off existing investors, skimming a little of the top for himself:
The seizure affidavit states that Apostelos “enticed investors to send him money with false promises as to how he would invest these funds and the rates of return that would be repaid for those investments” and that he guaranteed rates from 10 to 20 percent.
The promissory notes were typically signed by Apostelos and notarized by Rebekah Fairchild, Apostelos’ sister.
“In addition to ripping these investors off, basically, he was taking some of this money and purchasing several assets including cars and horses down in Kentucky,” Ferguson said.
Whereas Genesis Acquisitions International and WMA Enterprises appear to be recent efforts to break into the MLM industry through promoters like Ken Russo, most of Apostelos victims appear to be non-MLM related:
Records indicate Apostelos’ alleged victims include professionals such as doctors, cops and area car dealerships.
“We know of law enforcement officers who have invested with him and lost their entire life savings,” Ferguson said.
“It was spread a lot by word of mouth. One person would bring someone else in and, unwittingly — I don’t think it was intentional — but they were receiving large percentage ‘returns’ on their investments when, in actuality, it was just that someone else was investing.”
Michael Palermo appears to be close to or at the top of Genesis Acquisitions International. Palermo was involved in the raising of around $860,000 in July.
Apostelos delivered the promised ROIs and that led to figures like Russo getting on board in August for a second round of investments (minimum $5000 per investor). The announced payout
I became aware of the scheme when a BehindMLM reader forwarded a series of emails authored by Jim Goohs, soliciting investors for a third round of investments, scheduled to be paid out on October 24th.
In the email, Goohs claimed that Genesis Acquisitions International and investments made with Apostelos were “SEC Compliant” and “100% legal”.
Whether the advertised ROIs were actually paid out on the 24th is unclear.
At the time of publication, Apostelos, his insiders and those behind Genesis Acquisitions International remain at large.
The Apostelos — and other possible co-defendants Rebekah E. Fairchild and Scott A. Doak — have not been arrested nor are they in custody.
Ferguson said that is because once they are arrested, the clock will start on prosecution and investigators don’t yet know how widespread the alleged fraud is.
“It is an ongoing investigation because we believe that there are a whole lot more victims than we have identified,” he said.
“So, what we’re trying to do is identify who all the victims are so that we can determine exactly what the extent of the fraud is.
That, in and of itself, is going to determine restitution and it’s going to determine prison sentences as well.”
To the best of my knowledge, Kevin Russo hasn’t been seen or heard from publicly since I penned my article on Genesis Acquisitions on October 11th.
Ferguson said it will take time for the Internal Revenue Service, FBI, Springboro police and Ohio officials to go through paper records and computer files before a full picture is presented to prosecutors.
“We have a whole lot of work to do now that we’ve done the search warrants and got all those documents,” Ferguson said.
“So it’s going to take us some time to go through all the documents and identify all the victims and get a closer amount of loss or fraud.”
Bankruptcy court documents state that Apostelos “simply cannot be trusted” and that he told a petitioning creditor that he will “sell it all.”
Apostelos transferred the 168-acre farm he purchased for $1 million near South Vienna in Clark County into a trust and named his attorney, Steven C. Scudder, as trustee, court documents said.
Investigators are at the “tip of the iceberg” learning about Apostelos’ years-long scheme that spans several states, said Henderson, one of the attorneys representing creditors in Apostelos’ bankruptcy.
“We are concerned that he’s liquidating, that he’s going to hide assets” through the bankruptcy and criminal process, Henderson said.
“There are real concerns there: Knowing where this money is; where the resources have gone. From a civil perspective, that’s the real challenge.”
Moving to secure assets for recovery, the FBI have requested a seizure warrant to acquire assets Apostelos acquired, including
- two key bank accounts and two Morgan Chase Bank accounts that total several hundred thousand dollars
- a 2008 BMW M3 convertible
- a 2012 Lincoln Navigator
- a 2012 Ford F350 pickup truck
- a 2010 Lexus 460
- three racehorses named Baryshnikov, Bern Legacy and Shanon Nicole
- a $1 million farm in Clark County
The FBI ask that anyone who has invested with Apostelos (through Genesis Acquisitions International, WMA Enterperises or otherwise), to call (937) 222-7485 or Springboro police at (937) 748-0611.
Footnote: Our thanks to BehindMLM reader “lotdog” for the heads up.