On Wednesday, according to a complaint filed in a Brooklyn federal court, three men were charged with bilking $15 million from hundreds of individuals who believed that they were legally investing in lawsuit settlements. The trio, Peter Liounis, Ruslan Rapoport and Roman Tsimerman worked together on three separate such fraudulent schemes of litigation funding between December 2008 and April 2012.
Two of the fraudsters, Liounis and Tsimerman are in custody, while the third, Rapoport is still free as the charges on him relate only to conspiracy to commit wire fraud and money laundering. Both of the accused who are in custody are charged with wire fraud along with other lesser charges.
The defendants conceived a company in December 2008 called the Rockford Group and marketed itself as a “leading private equity firm.” It described its modus-operandi as investment in personal-injury and related litigation and promised 15 percent of money recovered by plaintiffs from their lawsuits.
However, the Rockford Group which was operative up to 2009, never invested in litigation, but wired the money to overseas bank accounts. Approximately, 200 U.S. and Canadian investors lost $11 million cumulatively.
In September, 2010, one of the individuals defrauded by the Rockford Group received a phone call from a familiar voice identifying himself as “Andrew Black from UBS.” Mr. Black said he was soliciting investments for an IPO of General Motors stock.
The individual tipped off federal agents who confirmed that there was no Andrew Black in UBS, and they halted the scheme with the funds being returned. Black was later identified as Liounis.
Again in March 2011, the fraudsters launched a third scheme with their original modus-operandi – that of litigation funding scam. They floated a company named Grayson Hewitt, and went on to spend the collected funds on buying gold, having expensive meals, and luxury items.
The Grayson Hewitt scheme bilked investors of near to $5 million.
The case is U.S. v. Liounis et al., in the U.S. District Court for the Eastern District of New York, no. 12-379.
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