Suspect in alleged Ponzi scheme says he’s a victim

Our reporters reviewed several court documents and talked with sources this week to bring you the latest details about the alleged Ponzi scheme. We will continue following this ongoing case for you.

Key Points:

  • William Apostelos is the mastermind of the alleged Ponzi scheme, the FBI says
  • A man the FBI says is a suspect calls himself a victim
  • No charges have been filed
  • The Aposteloses have had no legitimate source of income since 2010, the FBI says
  • About 200 investors lost more than $50 million, the FBI says

William Apostelos exuded a self-assured attitude that sucked in wealthy investors to an alleged Ponzi scheme that federal investigators say resulted in more than $50 million in losses, his former business partner told the newspaper.

Dr. Scott Doak, who the Federal Bureau of Investigation named in a seizure warrant as a potential defendant, said he is a victim who may have lost more than $1 million in Apostelos’ alleged financial schemes.

“I’m the biggest idiot, I guess, is what you’d say,” said Doak, CEO of OVO Wealth Management, one of the businesses housed in Apostelos’ Springboro office building. “Because not only did I trust him to invest my money, I actually believed in him so much that I went there and opened up a traditional investment company.”

Apostelos, his wife Connie, Doak and Apostelos’ sister Rebekah Fairchild were named in a FBI seizure warrant as part of an alleged Ponzi scheme in which local investors may have lost tens of millions of dollars through real estate deals, short-term loans, trusts and fake TD Ameritrade accounts.

No one has been charged, arrested or indicted in what FBI officials call a wide-ranging ongoing investigation that includes at least 213 potential victims and financial losses of what one involved attorney said could be “north of $50 million.”

Apostelos’ attorney, Dwight Brannon, said he wasn’t yet ready to comment publicly about the case. A message left on Apostelos’ phone was not returned.

Probe follows court action

The criminal investigation accelerated after at least eight judgments totalling $7 million were filed in common pleas courts in Warren and Montgomery counties, and Apostelos was forced into bankruptcy proceedings in U.S. Bankruptcy Court by creditors owed a combined $5 million, according to the court document.

The only thing “I’ve been told is, ‘You’re a victim. You’re a witness. You’re going to help us bring this guy to justice,’” Doak said, referring to his conversations with federal investigators, who would not comment about Doak’s assertion. Doak added that he went back to being an emergency room physician in August.

FBI Supervisory Senior Resident Agent Timothy Ferguson said the FBI stands by its seizure warrant affidavit and that investigators found it hard to believe that Doak could be actively involved in recruiting investors and not really know what was happening.

Doak’s newly-hired attorney, David Axelrod, said he’s been told by federal officials that Doak is “not a target” of the investigation. “If that changes,” Axelrod said, “we will defend the case vigorously.”

The case caught the attention of Florida attorney Jordan Maglich, whose website has a mostly comprehensive list of such schemes in the post-Bernie Madoff era — referencing the convicted Wall Street broker who perpetrated the country’s largest financial fraud case.

“It looks to be big,” said Maglich, who also writes a white-collar crime blog for Forbes magazine and represents a receiver appointed by a federal court to recover assets for victims of a $350 million Ponzi scheme. “It says something to me that the FBI’s involved in it and they are already moving to secure property. It appears (Apostelos and the other suspects) have some connection to some fairly affluent parts of the community.”

Maglich’s database lists 10 publicized Ponzi scheme defendants in Ohio since late 2010, including four in the past 12 months. In September, Cincinnati’s Glen Galemmo was sentenced to more than 15 years in prison and ordered to pay restitution of $34.5 million after pleading guilty to two counts related to a $100 million Ponzi scheme.

Little legitimate income

The FBI affidavit stated that despite owning a $1 million farm in Clark County, four higher-end vehicles and spending $35,000 per month on Connie Apostelos’ horse racing endeavor, the Apostelos claimed very little income on their past few Internal Revenue Service tax returns.

On their 2010 Form 1040, William and Connie Apostelos had a total adjusted gross income of $13,589 after Connie’s salary and the losses from stock sales and three rental properties, according to the court document. Also, the couple stated on their 2011 IRS form that they lost $49,026; on their 2012 return, their adjusted gross income was $18,535, according to the affidavit.

The Aposteloses have had “no legitimate source of income since 2010” and that their sole source of income has been “stolen from the funds investors unknowingly placed into the pyramid scheme,” according court document. The affidavit further stated that most of the business people, professionals and retired police officers who invested with couple “will have no chance of recovering those investments.”

Apostelos told investors they could log into a TD Ameritrade account to track their money, according to the court document. One person put in $100,000 and three months later the investment appeared to be worth $253,000, according to the affidavit.

The FBI agent who prepared the affidavit reported that an Ameritrade representative said what the investor was seeing was a training account program purchased by subscription that tracks the real stock market but is only a “paper money” account, meaning that there is no real money in it.

The affidavit states that the previous owner of the Apostelos farm, Heidi Black, may be an investor since no large payments were made to Black before the sale. “During the search warrant at 35 Commercial Way in Springboro, an Agreement to purchase the real estate on Houston Pike in South Vienna was discovered on Connie Apostelos’ desk, the affidavit said. “This agreement contains a promissory note from purchaser, William Apostelos, to seller, Heidi Black as Trustee of the John Hook Revocable Trust, in the amount of $1,010,000.00 with 20% interest.”

Black could not be reached for comment.

‘Walking the walk’

The OVO Wealth Management business plan showed offers aimed at police and firefighters and touted relationships with prominent horse trainers in Louisville, a prominent area dentist, the owner of a local jet charter and sales company and multiple auto dealers.

“It’s self-confidence,” Doak said of Apostelos’ appeal. “It’s, ‘Yeah, I’m rich and I’m walking the walk and talking the talk. Fake it ‘til you make it.’”

Doak said Connie Apostelos is a detail-oriented business person with a temper. He refers to Fairchild as a pawn who got bullied and fooled like everybody else. Connie Apostelos’ phone did not accept incoming calls and efforts to reach Fairchild were unsuccessful.

On Oct. 3, one unnamed victim told an investigator that he met with Apostelos to get his money back and Apostelos basically said that the pyramid had crumbled, the affidavit states.

“If this ends up being what it looks like it is, not only am I broke but every penny my parents has is gone and half my sister’s retirement’s gone and half my sister-in-law’s retirement is gone,” said Doak, adding that he’s been working 84 hours per week since August to pay off his massive credit card debt.

“It’s greed, that’s the bottom line. It’s greed.”

Date arrested/charged Name Amount No. of months sentenced City No. of victims
4/9/2010 Richard C. Shade, Jr. $6.3 million 70 Perrysburg 53
4/29/2010 Enrique Villalba Jr. $30 million 105 Beachwood 26
5/17/2010 David J. "DJ" Harriett $9.3 million 68 Warren 200
6/10/2010 Raymond Thomas $889,000 72 Mentor 25
10/11/2010 Kevin Harris $20 million 87 Warren 408
2/16/2011 Monroe L. Beachy $33 million 78 Sugarcreek 2,600
6/30/2011 Edward Allen and David Olson $14 million 90 and 52 Lakeland, Fla. Unavailable
7/10/2011 Jason Snelling $4.5 million 131 Anderson Twp., Ind. 30
12/17/2013 Glen Galemmo $100 million 180 Cincinnati 141
2/28/2014 Anthony Davian $2 million Unavailable Akron 20
3/7/2014 Jeffrey Kelly $5 million 60 Hilliard Unavailable
6/21/2014 Thomas Abdallah and Kenneth Grant $21 million Unavailable Brunswick and Copley 50
Source: and the U.S. Attorney’s Office

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