Daughter of Gay South Florida Ponzi Schemer May be Connected to Fraud

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Jim and Janet Ellis

An investigation regarding a state license for managing property may be the crux needed to connect Janet Ellis to a Ponzi scheme her father, Jim Ellis, pleaded guilty to Feb. 1.

When SFGN started its investigation in February 2012, it was Jim, now a convicted felon, who was the primary villain.

Since the story unfolded, many victims have tried to accuse Janet Ellis of being a participant in the fraud as well. They have argued that as property manager of Wilton Station, where so many of the victims lived, she used her position of trust to lure people into her father’s web through lavish parties and numerous get-togethers. But after a lengthy investigation by federal prosecutors, she has still not been charged with any criminal activity.

Having pleaded guilty to a conspiracy to defraud earlier this month, Jim has become a cooperating witness against the co-defendant, and alleged mastermind of the criminal enterprise, George Elia.

However, Janet’s antagonists are now suggesting that a state license she acquired for managing property may lead to her undoing, and is the link needed to connect her to the ill-fated Ponzi scheme.

There are three possible dots connecting Janet to the criminal enterprise. The first is a Department of Business and Professional Regulation report, and the second is her home, which may have been paid for by George Elia. A third link could be her initials on an investment check connected to the Ponzi scheme.

The DBPR Report

In May 2012, Rick Khun, a resident of Wilton Station, sent a letter to the Florida Department of Business and Professional Regulation, which supervises the licensing of professionals in the state, from cosmetologists to property managers. As a community association manager, Janet Ellis falls under its supervision.

Khun told the DBPR that Janet Ellis took advantage of her position at Wilton Station to improperly solicit investors for her father’s Ponzi scheme. The agency initiated a six-month-long investigation, conducted by DBPR staffer Valeda Jennings. Supervisors received her findings on Jan. 11, 2013, which included interviews with 24 “witnesses.”

Jennings told SFGN that her report first gets sent to the agency’s legal counsel for review, which can take three to six months before a decision or recommendation is made.

Typically, the agency will make a finding of whether probable cause exists to believe a regulation or law has been violated. Based on the severity of the accusation, and the weight of the evidence, anything from a letter of caution to license revocation may happen. Jennings emphasized that there is a wide range of possibilities.

According to the DBPR report, the matter under review is whether Janet wrongfully exercised undue influence on her clients “for the purpose of financial gain of the licensee or [a] third party.”

If the allegation were found to be true, it would violate a fundamental licensing rule governing the conduct of community association managers. That rule requires a licensee or registrant to “exercise due professional care in performance of community association management services.”

As she has done in the past, Janet refused to comment on the matter. A woman named Debbie at the condo association said, “This office has no comment.” She subsequently hung up the phone.

Since the inception of the investigation, a point of contention for the victims has been the continued employment of Janet by Wilton Station and Continental Management, the property management company that oversees the condo complex.

Continental Group released a statement to SFGN regarding the allegations against Janet: “The Continental Group views any allegations of improper action by an employee of the Company as a very serious matter. We will continue to closely monitor the situation as it may involve our community association manager at Wilton Station. Our paramount interest will continue to be providing professional management services to the Association.”

SFGN reached out to the current president of the board at Wilton Station, Peggy Kennedy, who declined to comment.

While Janet has refused to speak with SFGN, she did provide statements to Jennings, the DBPR investigator, who summarized them in her report. Jennings noted that Janet broadly claimed she had engaged in no wrongdoing whatsoever.

In fact, Janet told Jennings that she “needed to file bankruptcy, loosing  [sic] car, home and investments” due “to the decisions of her father, [Jim] Ellis.” Janet told Jennings “residents decided to invest when they saw the life Janet and James Ellis were living.”

Janet did, however, admit to organizing weekly happy hours for residents off the property. She asserted, though, none of it was for financial gain, claiming “the allegation of kickbacks is just ‘an allegation,’” and that she “received no gifts from any residents.” Janet refuted she used her position in the company for “scamming or self gain.”

Regardless of her assertions, Janet is linked to the Ponzi scheme by numerous witnesses interviewed by the DBPR investigator.

The following are unedited excerpts from the report:

Fred Okolowitz — Witness, Unit Owner

—   He was initially approached and verbally told by Ellis how well her investments were doing being handled by Elia;

—   He was invited to her house and to Capital Grill, where Okolowitz met with Ellis and James Ellis (her father).

Ray Fennon — Witness

—   Fennon said he had a conversation with “Frank” of Always Moving company, who stated Ellis was an “‘expletive,’ but does forward [Frank] lots of business…in exchange for a $100.00 thank you gift…so while he really hates dealing with her [Ellis], it is a good source of business.” Fennon indicated he was not surprised by this information about Ellis or Frank.

Lloyd Pagels — Witness, Non-Unit Owner

—   Pagels only knew of Janet Ellis socially.

—   Pagels suit with 14 others against George Elia and James Ellis, and does not involve Janet Ellis.

Gary Bramble — Witness, Non-Unit Owner

—   Bramble stated Janet Ellis initially said she had $25,000.00 invested with George Elia, then said the amount was $50,000.00, and that the investment was doing very well.

—   Bramble said he believes Janet Ellis plays a major part in all the investment business as she knows the worth of all residents at Wilton Station.

Stephen Walshe — Witness

—   Walshe stated he was not aware of any parties or gathering on the property organized by Janet Ellis; he was aware of parties organized at her home.

—   Walshe indicated no financial screenings or credit reports were performed on potential unit owners.

Chuck Donovan — Witness, Non-Unit Owner

—   Donovan travelled to Las Vegas with [Jim] Ellis and Janet Ellis, during which time Janet Ellis spent a great amount of money, as if it were not a problem, which was being given to her by her father, [Jim] Ellis.

—   Donovan attended parties held at Janet Ellis’ home, where the attendees were a combination of Wilton Manors unit owners and non-owners.

—   Donovan states [Jim] Ellis, in front of Janet Ellis said to tell George Elia the parties were a success in obtaining clients and potential investor, to support the expenditure for the party.

Steve Luciano — Witness, Unit Owner

—   Luciano stated he purchased his unit at the Condominium with cash, and that his dealings were entirely with Janet Ellis.

—   Luciano stated when he purchased the unit Janet Ellis directed him to attend the social gatherings where Luciano met [Jim] Ellis.

—   Luciano also stated that several times, [Jim] Ellis had taken him out to dinner and paid the tab.

The parties that keep popping up in the above statements were allegedly held at nearby bars and at Janet’s home, which is the second dot that connects her to the scheme.

The Ellis Households

When Jim Ellis pleaded guilty in U.S. District Court in Miami on Feb. 1, court documents show he admitted to a slew of items:

—   Jim Ellis conspired with George Elia to defraud investors.

—   Around 2006, Ellis gave Elia $24,000. Soon, Elia would be paying Ellis back from the invested amount, and from principal investments made by people Ellis helped recruit into the scheme.

—   While Ellis promised investors he had invested $100,000 with Elia and was made to trust the “daytrader,” banks accounts confirm this transaction never occurred.

—   Ellis told investors he’d received returns on his investment as high as 60 percent. Bank records confirm this never happened.

—   Ellis’ involvement in Elia’s company front ranged from cashing checks on the latter’s behalf to signing documents which would put him in charge in case Elia passed.

—   Ellis could sign off himself on the expensive lunches at Capital Grille that he and Elia took potential investors to.

—   Ellis received investments to Elia’s company front and deposited them himself.

—   Bank records show Ellis has received about $2.6 million from Elia, which he admitted broke down to about $23,000 a month.

—   Elia paid Ellis’ mortgages.

The last admission is especially relevant when it comes to Janet. According to Broward’s property appraiser’s records, Jim owns two properties in Wilton Manors. One of them is 2616 NE 16 Avenue, Wilton Manors. Its market value is listed as $308,610, as of 2013. Here’s the kicker: This address is the same one listed as Janet’s address in the DBPR report.

Janet lives in a house that her father Jim owns.

The admitted Ponzi schemer told the court that George Elia was paying his mortgages (emphasis on plural usage). This could mean that Elia, using Ponzi money, paid Janet’s house note.

This is the house that sources across the spectrum have cited as the location of the lavish parties and get-togethers where they would meet Ellis and subsequently learn about George Elia, the magical day trader.

Paper Trail

Finally, a memo line on a 2008 investment check for $14,000 may be referring to Janet.

“That was the first check that I gave to Jim,” Michael Nunnenkamp, another alleged victim of the Ponzi scheme, said. “He convinced me to take a home equity line of credit on my condo for the $14,000.” When doing so, Nunnenkamp went so far as to list Jim on the deed to the condo, which he would later sell for $20,000, and hand over all the money to him.

Nunnenkamp was in the headlines last week after protesting the Ponzi scheme in front of Wilton Station. He’s allegedly owed $10,000 by Jim Ellis.

“I’m not thrilled that [Ellis] pleaded guilty. I wanted to testify against him,” Nunnenkamp said. “I don’t hesitate to think that he’s told the court half truths or definite lies. The man is definitely a pathological liar,” adding, “and so is his daughter.” However, as SFGN has repeatedly pointed out, Janet is not a defendant in the criminal case.

Even without testifying, it appears Nunnenkamp may have been the source of hard evidence that connects both Jim and Janet to the multi-million dollar fraud. Jim vehemently maintained to friends – until his plea – that he himself was a victim. Janet has made the same claim about herself, both verbally and in her responses to the DBPR investigator.

But the plea agreement Jim signed reveals something more startling. It reads that “Ellis received a blank $14,000 from investor ‘M.N.,’ which Ellis made payable to International Consultants with ‘J.E. and J.E.’ in the memorandum.”

The M.N. is Michael Nunnenkamp. The first J.E. is Jim Ellis.

And according to Nunnenkamp, the second ‘J.E.’ is none other than Janet