SEC Brings Charges Related to Ohio-Based Petroleum Ponzi Scheme

Posted on July 7th, 2014 at 9:00 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Several Ohio residents were charged by the SEC with defrauding nearly $21 million from approximately 50 people in a Ponzi scheme.

Thomas Abdallah and Kenneth Grant set up a fake company, KGTA Petroleum, which supposedly bought and sold oil and fuel. They told investors that they would use funds to buy fuel at a discount,and then sell it for a substantial profit, thenpromised investors 2 to 4 percent returns each month and no market risk. They also promised that the funds and returns would flow to an escrow account. In reality, the person in charge of the escrow account never followed escrow procedure.

From Oct.8 2012 to February 2014, KGTA raised $20.73 million from investors, and used some funds to pay fake “returns” to investors. Abdallah and Grant also used funds for personal expense.

Moreover, two registered brokers, Jeffrey Gainer and Jerry Cicolani, solicited investors and facilitated the Ponzi scheme. They sold KGTA notes on their own and kept the transaction secret from their employer.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags:

Return to Archive

TESTIMONIALS

Previous
Next

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

April 25, 2024
B. Riley Financial Clears Air Amid Allegations, Stock Surges

Amidst swirling speculation regarding its connections with a client linked to the Prophecy Asset Management collapse, B. Riley Financial Inc. has conducted an internal
review, concluding no affiliations with the defunct hedge fund.

April 24, 2024
RIA Insurance Claims Skyrocket

A recent analysis by Golsan Scruggs reveals a staggering 231 percent increase in errors-and-omissions (E&O) liability claims among registered investment advisor (RIA)
insurers.

April 23, 2024
Surge Predicted in Regulation Best Interest Cases

According to a recent analysis, Reg BI-related actions quickly have ascended to the top five issues for FINRA, with fines totaling $6 million in 2023.