He used the funds to pay large expenses at casinos, says SD County man’s recent indictment – Faces max time of 30 years
In a recent Ponzi scheme case in San Diego, where the Ponzi scheme SD charges are making headlines, Denny Bhakta, 41, faces serious charges including securities fraud, bank fraud, and money laundering. If convicted, Bhakta could spend up to 30 years behind bars. The case involves allegations of obtaining $4 million in forgivable loans through the Paycheck Protection Program (PPP) by manipulating several entities under his control.
Photo by Denny Bhakta via InstagramUncovering the San Diego Ponzi Scheme
Court documents reveal that Bhakta allegedly misused PPP funds for personal expenses, including credit card payments, casino visits, and cash withdrawals. These charges compound his previous indictment for defrauding investors out of at least $28 million since 2016. Bhakta’s Ponzi scheme in San Diego involved deceiving investors about acquiring discounted Hilton hotel rooms and selling them to United Airlines for profit.
Read the Entire Complaint
Understanding Ponzi Schemes
Unfortunately, Bhakta’s investment scam is a classic example of a Ponzi scheme, promising high returns with minimal risk. These schemes use funds from new investors to pay off earlier investors, creating an illusion of profitability. The Bernie Madoff case remains one of the most notorious Ponzi schemes, defrauding thousands of investors out of billions of dollars.
Ponzi schemes have existed for centuries, often using red flags such as guaranteed returns and unregistered investment vehicles to lure unsuspecting individuals. The basic design involves using unsecured notes to entice investors with promises of high returns, while using the funds to pay earlier investors and perpetuate the cycle of deception.
Famous Ponzi Schemes in History
- Charles Ponzi’s original scheme (1920)
- Bernie Madoff’s $65 billion fraud (2008)
- Allen Stanford’s $8 billion certificate of deposit fraud (2009)
- Tom Petters’ $3.65 billion Ponzi scheme (2008)
In the ongoing investigation of Bhakta’s Ponzi scheme in San Diego, authorities have seized his 2017 Porsche 911 Coupe, which is subject to criminal forfeiture.
