John Woods (CRD # 1949233) is a former investment adviser with Southport Capital and Oppenheimer & Co. Inc. Woods has been accused by federal regulators with engaging in a ponzi scheme, called “Horizon Private Equity,” that took $110M from 400 investors in 20 states between 2008 and 2021.

What is a Ponzi Scheme and How did “Horizon Private Equity” Work?

A Ponzi scheme is a fraudulent investment scheme that promises high returns to investors, often without a legitimate underlying business or investment strategy. The scheme relies on using funds from new investors to pay returns to earlier investors, creating the illusion of profit. As long as new investments keep coming in, the scheme appears to work, but it inevitably collapses when there aren't enough new investors to sustain the payouts. This leaves later investors with substantial losses, while the orchestrator of the scheme siphons off funds for personal gain.

Along with his brother, Jim Woods, and others including Michael Mooney, Arthur Brown, Penny Flippen, and Britt Wright, Woods orchestrated the “Horizon Private Equity” Ponzi scheme by targeting elderly investors with the promise of 6-7% annual returns that were safe. Investors were told that they would be able to get their principal back without any penalty. In its complaint, the SEC found that these claims were patently false, that Woods lied to investigators, and that the scheme failed to generate legitimate profits. Consequently, returns to early investors were paid with the funds from new investors resulting in enormous losses to investors.  

Customer Disputes Filed Against John Woods

According to John Woods’s BrokerCheck report, he has an astounding 54 public disclosures, with 53 coming since August 2021 which relate to the “Horizon Private Equity” Ponzi scheme. Of the 53 disclosures related to the Ponzi scheme, 28 have already been settled for large six- and seven-figure totals. 

Settled disputes against John Woods related to the Horizon Private Equity Ponzi scheme include:

• September 2021 for $35,500,000.

• November 2021 for $5,000,000. 
• March 2022 for $3,100,000.
• March 2022 for $2,575,000.
• November 2021 for $2,500,000.

If you believe that you were a victim of John Woods or the Horizon Private Equity Ponzi scheme, you need to speak with an attorney. An attorney can help you determine your legal options.

Your Rights If You Sustained Losses Related to Broker Misconduct

If you were the victim of this Ponzi scheme, you have the right to an attorney. You have the right to pursue a claim for damages against any and all liable parties. You also have the right to hold wrongful parties accountable for their misconduct. 

Did You Suffer Losses After Investing with John Woods?

At Meyer Wilson, we represent investors who have suffered losses due to investment fraud or broker misconduct. Our lawyers have secured over $350 million on behalf of clients nationwide. We have represented over a thousand investors and will fight for you and your family.

If you sustained losses after investing with John woods or another broker accused of wrongdoing, you need to contact our office to schedule a free consultation. Call (866) 761-1981 to speak directly with an experienced investment fraud lawyer.

We have decades of combined legal experience and are nationally recognized for our successful litigation and arbitration of investment fraud cases. Do not hesitate. Call now to get started.

A Ponzi scheme’s collapse almost always leads to a bankruptcy, receivership, or some other formal liquidation proceedings.  In these proceedings, a trustee or receiver is charged with collecting as much funds as possible to pay creditors and defrauded investors.  Among the methods used to recover assets are claims against investors who received returns from the Ponzi scheme.  These claims are referred to as a “clawback actions.”

Clawback actions are incredibly controversial.  How can an innocent defrauded investor now be subject to a lawsuit from the receiver or trustee? The subjects of these suits often argue that they had no knowledge of the fraud and had every reason to believe the money they withdrew from their investment accounts was legitimate profits.  Most of the time, the money received by the defrauded investor has been spent – on a house, on college tuition payments, or on basic living expenses.  Returning the earned income to a receiver can be devastating or impossible.

The legal theory is that money received by defrauded investors came from other defrauded investors, and all investors should be on equal ground.  Clawback actions are supposed to be filed against “net winners” in a Ponzi scheme – meaning people that earned more than what they invested.  In our practice, we have seen clawback actions filed against many people who were “net losers,” subjecting them to steep legal fees just to prove they did not make any money overall in the Ponzi scheme.

The money raised in clawback actions is supposed to be divided equally among the Ponzi victims, but questions remain as to where the money actually winds up.  Bankruptcy trustees earn commission on assets recovered, and commissions and trustee legal fees are paid out of the funds raised by the trustee.  So, money from defrauded investors often goes back to pay the lawyers involved in the clawback case rather than going to the Ponzi scheme victims.

Arthur Lamar Adams of Mississippi pleaded guilty to orchestrating a massive Ponzi scheme exceeding $100 million stolen from more than 250 investors in at least 14 states. He was sentenced to almost 20 years in prison.  Meyer Wilson currently represents victims of his scam.

Adams and his cohorts represented to investors that a company called Madison Timber Properties was in the business of buying timber rights from landowners and then selling the timber rights to lumber mills at a higher price. The object was to get people to invest in loans that purportedly were for the purpose of financing contracts for the purchase of timber rights to be sold to lumber mills at a higher price.  Madison Timber Properties did not have timber rights or contracts with lumber mills.  Instead, the money from unsuspecting investors lined the pockets of the scammers involved.

Investors were guaranteed that they could expect 12% to 15% returns on the investment they made.  To any competent financial advisor, this should have been a red flag of a probable Ponzi scheme or investment fraud.  High returns come with high risks, and if it sounds too good to be true, then it probably is. If your financial advisor ignored the red flags and recommended you invest in Madison Timber Properties, you may be able to recover your monetary loss.  Give the investment fraud attorneys at Meyer Wilson a call today for a free case evaluation.

This Tuesday December 11, 2018 marks the 10^th anniversary of Bernie Madoff’s arrest for perpetrating the largest Ponzi scheme in history. For many of the investors victimized by Madoff’s $19 billion fraud, this day brings more even reason to celebrate. In a bankruptcy court hearing, the trustee unwinding Madoff’s long-defunct investment advisory firm sought authorization of $419 million in distribution payments to nearly 900 accounts.

That $419 million payment brings the total payouts for wronged investors to just over $12 billion. While that figure will never approach the $45 billion in fraudulent profits claimed by Madoff on account statements, a return of that magnitude is quite rare.

In honor of this particular day, we’ve put together a few points about Madoff’s operation, where things currently stand, and what lessons we’ve learned:

• The scheme – As founder of Bernad L. Madoff Investment Securities, Madoff turned his Wall Street firm’s wealth management branch into an elaborate Ponzi scheme. By fabricating client records and securities transactions, Madoff led thousands of investors to believe he was trading on their behalves for modest and consistent returns, all while using their money to prop up the firm’s failing market-making unit, pay other client withdrawals, and accumulate riches for himself and his inner circle.
• The downfall – With unsustainability being a common hallmark of Ponzi schemes, Madoff’s setup began to eventually deteriorate. As the general market downturn accelerated in the fall of 2008, investors requested to withdraw $7 billion from the firm. Unfortunately, Madoff had deposited their money into his business account, which despite having well over $5 billion at one time dipped to a dangerously low $230 million in November of 2008. Though he scrambled to keep the fraud afloat, the scheme ultimately succumbed to the avalanche of withdrawals.
• The arrest – By the end of November 2008, Madoff knew he was approaching the end of his rope. His business account drained and options for borrowing enough money to meet outstanding redemption requests non-existent, Madoff directed an aide to use the account’s remaining balance to cash out close friends, family, and favored clients. On December 10, 2008, Madoff confessed to his two sons, Mark and Andrew, who reported him to law enforcement. Madoff was taken into custody by the FBI the following day.
• The charges – On March 12, 2009, Madoff appeared in court for a plea proceeding. With no plea agreement or deal with prosecutors, he pleaded guilty to 11 federal charges, including securities and investment advisor fraud, mail and wire fraud, money laundering, perjury, false statements, making false filings with the SEC, and employee benefit plan theft.
• The Sentence – In June of 2009, Madoff was sentenced to 150 years in prison, the maximum under federal sentencing guidelines. At his sentencing hearing, Madoff apologized to his victims, many of whom had lost their life’s savings, and some who had or would eventually go on to take their own lives. Now 80 years old, Madoff is currently serving his sentence at the Butner Federal Correctional Complex in North Carolina.

While the scheme will long retain its indelible mark in the pages of history, and the name Madoff now synonymous with greed, it’s important to not forget the devastation Madoff left in his wake. From the many convictions of aides, employees, and family that followed to the tragic stories of investors who trusted Madoff’s firm, the scheme is a glaring reminder of the need to improve our systems of oversight and accountability. Though the trustee overseeing the case has made the recent payment and is currently evaluating a revival of lawsuits from overseas investors worth around $4 billion, there’s still a lot to be done, both for victims in this case, and all investors at risk of becoming the next.

Meyer Wilson: Attorneys for Investment & Securities Fraud

For investors today, it’s worth noting that Ponzi schemes didn’t cease to exist when Madoff’s particular scheme went south. These types of schemes and many other forms of investment fraud are continually perpetrated across the country, with investors paying the price. Fortunately, financial crimes do provide an opportunity for the recovery of assets by victims, and our team at Meyer Wilson is committed to helping investors nationwide make the most of this opportunity in a range of investment misconduct claims.