Two men have been arrested for fraud after they have scammed victims for $25 million through a Ponzi scheme. They claimed to be looking for investors for a huge casino resort in Mexico that turned out to be completely non-existent.
The duo was identified as Thomas Paul Madden (66, Washington City, Utah) and Jeremy Tyler Grabow (54, Ladera Ranch, California). Together they operated through a fraudulent computer systems company registered under the name Savitar. Prosecutors found that this was jointly controlled by the two of them and used to extract enormous sums of money from the victims.
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This phantom casino fraud seems to have started in 2021 with at least 10 documented victims at the moment. The duo fabricated a story about their partnership with MGM Resorts, a veritable titan of the casino industry, as well as the Mexican operator Cabo Paradise. To add more to their false image, they also included a false claim that they partnered with Datapod data centers and the Mexican Lottery. The supposed resort was to be built in the attractive Cabo San Lucas, and they were looking for additional investments on top of already accumulated millions of dollars.
In parallel to the Savitar scam, Madden was also operating a Ponzi scheme. Madden’s second fraud company was registered under the name Cascade. This particular scam seems to have started as early as 2017, when Madden and Grabow started promising their investors large returns from stock sales. However, they never invested the funds they got from their victims, but instead used them to fund their lavish lifestyle while using a part of the money for Ponzi payments. The number of victims is suspected to be as high as 200, with more than $23 million extracted to the suspects’ personal accounts. Madden was first arrested after issuing bad checks in 2023 as a part of the Cascade fraud. His first felony conviction didn’t stop him, and he asked for probation in order to bring in funds from the (also fraudulent) project in Cabo. This is highly reminiscent of a recent Carlsbad case that defrauded dozens for several millions.
Both men now face several charges of conspiracy to commit wire fraud and money laundering. Madden and Grabow are set to appear in court as early as this month, with the further proceedings starting after a thorough investigation, possibly in the first quarter of next year.
Citizens are encouraged to stay informed on the characteristics of Ponzi schemes. These financial scams are usually easily recognizable by the promise of high returns with little or no risk. Organizers will then take money from new investors in order to pay a fraction of returns to their earlier victims, thus creating a mirage of a functioning project, while they are extracting most of the money for their personal expenses. These schemes need a constant influx of new money to keep working and maintaining the illusion of a successful business. Once the investments start slowing down, the scheme is prone to falling apart, as happened here. The U.S. Attorney’s Office has issued a call for everyone suspecting they were a victim of this fraud to reach out to them through their Victim Witness Assistance contact page.
