Utah, California Men Arrested for $25M Ponzi Scheme Linked to Fake Mexican Casino

Posted on: February 4, 2025, 10:25h. 

Last updated on: February 4, 2025, 10:53h.

Federal authorities in Utah have indicted two men for operating an alleged $25 million Ponzi scheme while convincing victims to invest in a phantom casino project in Mexico.

Thomas Paul Madden, Jeremy Tyler Grabow
An AI-generated image of a nonexistent Mexican casino, perhaps similar to the one that federal prosecutors allege Thomas Paul Madden, top right, and Jeremy Tyler Grabow described to their investors. (OpenArt/St George News)

Thomas Paul Madden, 66, of Washington City, Utah, and Jeremy Tyler Grabow 54, of Ladera Ranch, Calif., falsely claimed they were involved in a large casino resort project in Mexico through a bogus computer systems company called Savitar, an entity they jointly controlled, according to prosecutors.

‘Mirage’ Casino

Beginning in 2021, the defendants told at least 10 victims they were working in partnership with casino giant MGM Resorts, Mexican tour operator Cabo Paradise, data center company Datapod, and the Mexican Lottery on the project. They claimed the casino would be built in the resort town of Cabo San Lucas and that Savitar had already received millions of dollars in investment.

But the casino was a fantasy. Savitar didn’t have the represented business partnerships and lacked any business operations other than being a bogus investment vehicle.

The Savitar scheme made more than $2 million for the pair, which was used to pay earlier investors and personal expenses, according to prosecutors.

Meanwhile, Madden was also operating a separate Ponzi scheme through another bogus investment company, Cascade.

Since 2017, the defendant promised investors big returns from penny stock sales. But instead of investing the funds, prosecutors claim he used the money for Ponzi payments and personal expenses. In this way, Madden was able to extract $23 million from around 200 alleged victims.

Bad Checks

Madden was arrested in 2023 for issuing bad checks to his investors but continued to seek new investments even after his felony conviction in the Utah Fifth District Court in 2024.

On March 7, 2024, while asking the Fifth District Court judge for a probationary sentence so that he could “meet restitution obligations to investors,” Madden told him – falsely – that the “project down in Cabo … could be funded as soon as next week, which will bring in substantial funds,” according to court documents.

A federal grand jury returned an indictment last week, leading to arrests. Madden is charged with four counts of wire fraud, while he and Grabow are both charged with wire fraud conspiracy and money laundering conspiracy.