Local attorney and accomplices charged in Ponzi scheme scandal

Bozeman Attorney Charged in Connection to Ponzi Scheme and Investor Fraud

Background

Last week, Michael Rabb of the Rabb Law Firm, along with three others including Byron Gruber, were charged with six felonies related to their involvement with Isotex Health, LLC., a Texas-based CBD isolate start-up. The group is alleged to have operated a Ponzi scheme, defrauding investors and farmers of more than $6 million. Jason Bradley Cross and Eugene Elfrank, both identified as shareholders, managers and directors of Isotex, were also charged.

The Charges and Allegations

The Commissioner of Securities Insurance (CSI) and Gallatin County Attorney have charged the group of four with conspiracy to defraud investors, farmers, and the state of Montana, operating a pyramid promotional scheme, securities fraud, forgery, theft, false claims to a public agency, and operating as a commodities dealer without a license.

Court documents reveal that the group “willfully violated” state statute “by knowingly and purposely inducing investors… to make payments in excess of $6 million, which would then be used to pay prior investors”. They are also accused of threatening employees, investors, vendors, and contractors with litigation to quell dissent, propagate untruths, cause delay, and improperly advance the goals of the co-conspirators. Additionally, the group is said to have forged, manipulated, and altered documents including financial statements and crop insurance information and provided “false information to investors, potential investors, farmers, vendors, contractors, creditors and the State of Montana.”

The allegations relate to conduct between April 2019 and July 2020 in seven Montana counties.

Reactions

In an email to the Chronicle, Michael Rabb claimed that he was “shocked” by the allegations and that he had only received a “membership interest” of 1% from Isotex. He denies any direct involvement or control of the company’s management or operations and says that his role was limited to providing legal advice and services. Rabb’s law firm specializes in personal injury, real estate and business and employment.

Byron Gruber was previously employed by Rabb’s law firm from Oct. 2020 to July 2022. Fraser Stryker, a law firm based in Omaha, Nebraska confirmed that Gruber had joined their firm in 2023 but is no longer associated with the firm and that they had no knowledge of the activity with which Gruber has been charged.

Court proceedings for all four defendants are scheduled to begin at the Law and Justice Center in Bozeman on July 2, 2024.

Conclusion

The charges against this group alleged to have defrauded investors and farmers of more than $6 million via a Ponzi scheme are a reminder that investors need to exercise caution when choosing where to invest their money. Ponzi schemes often promise high returns with little to no risk, making them an attractive option for unsuspecting investors. As always, it is important to do thorough research and seek the advice of trusted professionals before investing in any opportunity.

Keywords: Bozeman attorney, Ponzi scheme, investor fraud, Isotex Health, LLC, Texas-based CBD isolate start-up, Gallatin County, Commissioner of Securities Insurance, conspiracy to defraud, pyramid promotional scheme, securities fraud, forgery, theft, commodities dealer, membership interest, legal advice, Rabb Law Firm, Fraser Stryker.

Originally Post From https://insurancenewsnet.com/oarticle/local-attorney-others-charged-for-alleged-ponzi-scheme