Alleged Ponzi scheme victims trusted client list

Judgments owed by William Apostelos

The FBI has identified at least 213 victims of William Apostelos’ alleged Ponzi scheme. About a dozen of those people already have won non-contested judgments from common pleas courts in Warren and Montgomery counties. Below is a list of promissory note judgments those victims are owed, according to a court document. The total below is nearly $13.5 million plus interest.

Tips on avoiding scams

Source: Ohio Dept. of Commerce

Alleged victims invited to meet

One potential victim who wished to remain anonymous said others who are in the same situation are invited to meet from 3:30 to 5 p.m. “for prayer and for healing” Saturday, Nov. 22, in the older building closest to the parking lot at the Vineyard Church, 4501 Indian Ripple Road in Beavercreek.

Brief history of Ponzi scheme

Boston businessman Charles Ponzi is the scam’s namesake, but he wasn’t its original practitioner. According to Mitchell Zuckoff, a Ponzi biographer, the reigning king of the “rob Peter to pay Paul” scam was a New York grifter named William Miller, who bilked investors out of $1 million — nearly $25 million in 2008 dollars — in 1899.

After drumming up interest by claiming to have an inside window into the way profitable companies operated, Miller salted his scam by paying out the first few investors. After his racket was exposed by a newspaper investigation, he was sentenced to 10 years in prison.

Ponzi was an Italian immigrant who, in 1919 and 1920, coaxed thousands of people into shelling out millions of dollars — including a staggering $1 million in a single three-hour period — to buy postage stamps using international reply coupons. This strategy, Ponzi promised, enabled one to purchase postage at European currencies’ lower fixed rates before redeeming them in U.S dollars at higher values.

Source: Time.com

Key Points:

The references William Apostelos gave Daniel Peffley read like a Who’s Who list of prominent people in DAlyton.

“I called every one of these — psychologists, doctors — and they all just raved about him,” said Peffley, 65. “And I said, ‘well, OK, we’ll give it a shot.’”

Peffley said he invested — and lost — more than $1 million of his retirement savings, lured by Apostelos’ sales pitch of big returns, his list of seemingly satisfied customers and his casual appearance and trusting demeanor.

Apostelos told him he just wanted to help others, and was convincing enough that Peffley believed him.

“The really heartbreaking thing is the level of quality and integrity of his clientele is unmatched,” said Peffley, whose grandfather founded the Peffley Ford business in the Dayton area. “These are some of the finest cream of the crop people in Dayton. It’s a Who’s Who list of people in Dayton. This is why we all trusted him.”

Apostelos, his wife, Connie, and others are being scrutinized by the FBI for running a Ponzi scheme that involves more than 200 investors and tens of millions of dollars, according to an affidavit filed in federal court last month. Officials raided the couple’s home and business Oct. 29 in Springboro and removed several items from both locations.

No charges have been filed.

An FBI official said last week there were no new developments in the case, while prosecutors did not return a message seeking comment. Apostelos’ attorney declined to comment, and a message left on Apostelos’ phone was not returned.

The federal investigation coincides with uncontested civil court actions enforcing promissory notes and a forced bankruptcy in U.S. Bankruptcy Court. The records show Apostelos owes nearly $13.5 million plus interest to about a dozen people — including Peffley — who filed complaints in Warren and Montgomery counties.

Court documents and newspaper interviews reveal William Apostelos promised returns of 10 to 20 percent or more — promises experts say should be scrutinized.

“Anybody who promises fixed returns, you should be very leery about that. That’s not real world,” said Robert Hanseman, who represents creditors in the forced bankruptcy case. “Anytime anyone guarantees a return, that’s a danger sign.”

His advice for consumers is to make sure to deal with certified financial planners or registered investment advisers with references and a successful track record.

“Many of these people would invest after very little due diligence. Maybe they heard about him while on the golf course, or from friends,” Hanseman said. “God bless people for being honest and trusting, but not everybody can be trusted in that way.”

Experts say Ponzi schemes thrive on an operator’s ability to recruit investors who recruit other investors, often using claims of returns from the people at the top of the pyramid.

“You have friends who are telling friends who are telling friends that, ‘hey, this guy promised me X percent of returns, he’s paying it, it’s got to be legitimate and suddenly you go from dozens of investors to hundreds of investors,” said Jordan Maglich, a Florida attorney whose ponzitracker.com website tracks Ponzi schemes throughout the country.

‘I’m without words’

Peffley, who now lives in California, said Apostelos put him at ease. He wasn’t flashy; on a visit to California he wore Crocs and a T-shirt.

“Here’s what hooked me,” said Peffley, who has known Apostelos since 2007. “He was out here one time and he said that the only thing he wanted to do was treat his fellow man right and do the right thing and help people because when he dies, he wants to see his (first) wife who died from cancer.

“That was it for me. … I said this guy is my kind of person. When you go that low to make (stuff) up … I’m without words.”

Peffley, who has a judgment of nearly $1.3 million against Apostelos, said one area businessman told him Apostelos paid big returns on investments “like clockwork” for 20 years.

“That’s the scary thing,” Hanseman said. “That somebody could pull that off for so long.”

For Peffley, doubts started creeping in when he noticed that paperwork was getting withheld, he said. He talked with other Apostelos associates, who defended Apostelos.

“Other investors were mad at me; I ended up looking like the bad guy,” Peffley said. “We depended on him. I kept telling him that. And he said, ‘No problem. I’ll get you your money.’”

When Apostelos continued to miss payments, Peffley filed a lawsuit in Warren County Common Pleas Court to recover his money. That was the first of at least eight suits filed by investors seeking money that had been promised by a certain date.

Peffley said not only was he a victim, he turned other people into victims.

“I got people out here involved … referrals that I’m heartsick about,” he said.

‘I believed it’

Jason Dennis of Dave Dennis Chrysler Jeep Dodge Ram in Beavercreek started investing with Apostelos in 2010, he said, after he had heard about Apostelos by word-of-mouth.

“I believed it. The people that he had working for him made him very credible,” Dennis said. “It always worked out fine up until the last eight months.”

Dennis, who received a judgment for about $1.1 million following his civil claim, said, “I’d love to get my principle back out of the situation. But time will tell.”

Another investor, who asked to remain anonymous, said he initially had doubts about Apostelos and debated within himself about whether Bill was like Bernie Madoff.

“I even questioned him about that in a nice way,” the investor said. “I said to him, ‘Bill, if you’re taking people, you’ll have to answer not to us, but maybe in the next life.’ “

Like Peffley, he was won over by Apostelos’ clients, one of whom was known to have handed over millions of dollars to Apostelos. “He’s a big businessman,” the investor said. “He ought to be smart enough to know also, so just things like that, I didn’t suspect. I thought he was legit.”

The investor, who did business with Apostelos for about a decade, said he’s probably out about a quarter-million dollars of retirement money.

Hanseman said Ponzi scheme perpetrators have similar characteristics.

“The ‘con’ in con man stands for confidence,” he said. “These are normally fairly charismatic people that are good at explaining things. They’re good at convincing people. They’re good at instilling confidence.”

Hanseman represented the investors who lost money to former minister and swindler Roy Dillabaugh of Washington Twp. Dillabaugh wrote a note to his wife that read, “I am (was) a criminal!,” sometime before he drove his car into an overpass pillar and died in 2007.

Dillabaugh, who posed as an investment adviser and pocketed $12.4 million from 146 victims, used the money to buy millions of dollars of life insurance on himself. He later felt guilty, according to Hanseman, and instructed his wife to pay off the victims following his death. Ultimately, he said, the victims received only partial settlements and nothing from the life insurance payments.

‘Coming out of the woodwork’

Hanseman said his office is tracking the widening circle of potential victims: “We have been receiving phone calls every single day by people we have never heard of before literally coming out of the woodwork and saying, ‘Hey, I invested, too.’ What we ask them to do is to call law enforcement and let them know.”

Dennis doubts Apostelos and his wife worked alone: “I can’t believe that Bill Apostelos is that good and can hide that much money and move all that money around with all those checks and all those wire transfers … and that none of those people knew anything about it.”

Four people — Apostelos, his wife, Connie; sister Rebekah Fairchild; and Dr. Scott Doak — are listed as suspects in the federal affidavit. Doak has acknowledged that he recruited investors but says he was unaware of the alleged Ponzi scheme and is a victim himself.

The investor who wanted to remain anonymous said other potential victims may be ashamed and don’t want to speak publicly.

“When you’ve lost three-quarters of your retirement and you have plans and you’re trying to do some things you haven’t been able to do in life, how would you feel? My jaw kind of dropped,” he said. “To see these people that I know and I’ve invested with (and) their pictures in the paper, it wasn’t good.”