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Sunday, May 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Attorney Said to Lead $350 M Ponzi Scheme

DETROIT (CN) - Questar Capital Corp. and GunnAllen Financial are accused of helping an attorney set up "phony businesses with no actual operations and nonexistent streams of revenue" the took 700 investors for more than $350 million, in a Federal Court class action.

The lawyer, Edward P. May, is alleged to have orchestrated a 12-year Ponzi scheme assisted by stockbroker Frank Bluestein and Bluestein's company, The Maximum Financial Group.

Defendants are accused of bilking investors by selling unregistered securities in phony LLCs created by May that "allegedly held contracts to provide telecommunications services to business, mainly hotels and casinos. Plaintiffs include from 700 to investors from around the country, but primarily in Southwest Michigan," the complaint states.

It continues: "The telecommunication contracts that the LLCs allegedly held were in fact nonexistent. There were no contracts, and there were no revenue streams being generated by the LLCs in which Plaintiffs invested. There were no LLCs. The entire operation was an absolute scam. Losses have been estimated to be as high as $350,000,000."

Plaintiffs say, "The story of the Ponzi scheme led by May, and his company, E-M Management Co. LLC first became public in 2007. ... It has also led to a lawsuit filed against May and E-M by the United States Securities and Exchange Commission in the Federal District Court for the Eastern District of Michigan, Case No. 2:07-cv-14954.

"Bluestein, May and GunnAllen are now all pointing fingers at one another. No one has taken responsibility for the hundreds of millions of dollars in losses suffered by Plaintiffs, many of whom were retirees and elderly persons".

May is not named as a defendant in this lawsuit.

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