Recently, Denny Bhakta, 41, of San Diego County, faces securities fraud, bank fraud, and money laundering charges. He could face 30 years in prison if convicted. Bhakta is accused of obtaining $4 million in forgivable loans through the Paycheck Protection Program (PPP) by using several entities he managed and controlled. The PPP was designed to help small businesses by providing forgivable loans for payroll and other eligible expenses.
According to court documents, Bhakta allegedly used the PPP funds for personal expenses, including credit card payments, casino expenses, and cash withdrawals. These charges are in addition to his previous indictment for defrauding investors out of at least $28 million since 2016. Bhakta made investors believe that he was acquiring discounted groups of Hilton hotel rooms and selling them to United Airlines for profit. However, he was using their money to pay off other investors and for personal expenses.
Read the entire complaint below.
Bhakta's investment scam is known as a Ponzi scheme, which promises high returns with little risk. These schemes use funds from new investors to pay off earlier investors, creating the illusion of profitability. However, they will eventually collapse once new investors stop coming in. Bernie Madoff orchestrated one of the most notorious Ponzi schemes, defrauding thousands of investors out of billions of dollars.
Ponzi schemes have been around for centuries and use red flags such as guaranteed returns and unregistered investment vehicles to lure in unsuspecting individuals. The scheme's basic design is simple, using unsecured notes to entice investors with the promise of high returns. However, the funds are being used to pay earlier investors, perpetuating the cycle of deception.
To date, Bhakta's 2017 Porsche 911 Coupe was also seized due to being subject to criminal forfeiture.
Read the complete motion below.
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