New York Families Claim Questar Broker Sold Ponzi Scheme as "Safe"

NEW YORK, June 28, 2011 /PRNewswire/ -- The law firm of Securities Fraud Attorney Mark A. Tepper has filed more claims against Questar Capital for the activities of Edward Phillip Gelb, a broker in its Melville office who allegedly deceived three New York families to invest in JP Mumbles, a Ponzi scheme originally called IPDS.

The Ponzi scheme was run by John Konoski, who was arrested and pled guilty to charges relating to operating a scheme to defraud together with grand larceny in excess of $1 million.

In the claim filed with the Financial Industry Regulatory Authority (FINRA), Tepper, a former New York Assistant Attorney General and Chief Trial Counsel at the Bureau of Investor Protection and Securities, alleges that the families from the Bronx, Bayside and Forest Hills were each deceived into investing "in a Ponzi scheme, disguised as a safe, guaranteed investment, to Claimants – a group of trusting investors who were Questar's customers."

"Questar has a disturbing pattern of breaching its duty to supervise its agents' activities in its customer accounts.  This is not the first time Questar failed to supervise its Agents," the claim contends.

Tepper previously filed claim against Questar Capital for the same broker's alleged deceit of four other New York families while recommending that they take home equity loans, to put even more than they could afford into the same Ponzi scheme.

"Prior to Questar breaching its duty to supervise Gelb, the SEC had warned broker-dealers, like Questar, that small, remote offices, like Questar's Melville Office, require vigilant supervision," the claim alleges.

The claim alleges that 21 Questar customers invested more than $1.7 million in the unregistered JP Mumbles.

About Mark A. Tepper, P.A. (www.MarkTepper.com)

Attorney Mark Tepper has earned the reputation of "Investor Advocate" while practicing law for over 30 years and representing the individual investor. FINRA arbitrators recently upheld claims filed by Tepper against a number of large financial services companies, recovering investor losses from Merrill Lynch (MER) for high risk investment in Fannie Mae Preferred Stock, Charles Schwab (SCHW) YieldPlus, and Wachovia - now Wells Fargo, (WFC). Pending cases include claims against UBS. A member of the Florida, New York and California Bars, Mr. Tepper is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.

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SOURCE Mark A. Tepper, P.A.