Blog Posts Tagged With Ponzi Schemes, Offering Frauds, and Other Scams

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SEC v. David A. Harbour (D. Ariz. July 31, 2018, Settled)

Action against Defendant, an individual, in connection with an alleged scheme to misappropriate investor funds.  The SEC alleges that the Defendant made material misrepresentations about the use of investor money as the Defendant allegedly told investors he would put the funds towards payday loan enterprises.  However, the SEC alleges the Defendant used investor funds for personal expenses instead.  Defendant has agreed to pay $1,535,000 in disgorgement, $97,072 in prejudgment interest, and a $1,535,000 civil penalty. ... Continue Reading

In re Brandon T. Neff (A.P. July 31, 2018, Settled)

Action against Respondent, an individual, in connection with an alleged scheme to use an unregistered broker-dealer to collect commissions from investors related to sales of an investment vehicle controlled by Respondent and associated persons.  The SEC further alleges that Respondent made misrepresentations to investors regarding his experience, the status of the broker-dealer, the underlying investment, and use of investor funds.  Respondent has agreed to pay a $5,000 civil penalty.

SEC Order ... Continue Reading

SEC v. Howard M. Appel (E.D. Pa. July 27, 2018, Settled)

Action against Defendant, an individual, in connection with an alleged market manipulation scheme of certain microcap stocks.  The SEC alleges that Defendant orchestrated coordinated and matched stock trades to give the appearance of increased liquidity.  The SEC further alleges that Defendant engaged in a “pump-and-dump” scheme to increase the price of the stock and then sell it at a profit.  Defendant has agreed to a bar as an officer of a public company and to ... Continue Reading

SEC v. William Z. (“Billy”) McFarland, et al. (S.D.N.Y. July 24, 2018, Settled)

Action against Defendants, the owner and CEO of various purported entertainment businesses, two companies he founded, a former senior executive, and a former contractor, in connection with an alleged scheme to solicit investment in the companies based on material misrepresentations regarding the companies’ performance.  The SEC alleges that the individual Defendants made statements misrepresenting the companies’ performance and falsified supporting documents.  The SEC further alleges that Defendants falsified acquisition offers for the various companies. The ... Continue Reading

SEC v. John Geraci (S.D.N.Y. July 17, 2018, Contested)

Action against Defendant, an investment fund director, in connection with an alleged scheme to solicit investment funds.  The SEC alleges the Defendant made material misrepresentations and omissions regarding the Defendant’s experience, the fund’s performance, and the use of client’s investment money.  The SEC further alleges that the Defendant used client’s money for personal expenses.  A parallel criminal action has been announced.

SEC Complaint

SEC Litigation Release ... Continue Reading

SEC v. Daniel Rudden, et al. (D. Colo. July 17, 2018, Contested)

Action against Defendants, an owner and operator of investment funds and the operator’s associated funds, in connection with an alleged Ponzi scheme.  The SEC alleges that Defendant funds engaged in “life insurance assignments” and when the fund Defendants could not meet its promised rate of return, the individual Defendant used investment money from newer investors to pay the promised returns.  The SEC further alleges the individual Defendant made material misrepresentations to the fund Defendant’s performance ... Continue Reading

SEC v. Mark E. Burns (S.D.N.Y. July 11, 2018, Contested)

Action against Defendant, an individual, in connection with an alleged scheme to manipulate the stock price of Fitbit by submitting false SEC filings.  The SEC alleges that Defendant and an accomplice gained access to the SEC’s EDGAR filing system under false pretenses and submitted a false tender offer for Fitbit stock, at a premium to Fitbit’s market price.  The SEC further alleges that Defendant profited from this scheme by buying short-term options before submitting the ... Continue Reading

SEC v. Edward A. Young and Guardians Trustee, LLC (D. Wyo. July 11, 2018, Settled)

Action against Defendants, an individual and the Defendant’s LLC, in connection with an alleged scheme to misappropriate investor funds.  The SEC alleges that the Defendant created the LLC to act as a “Private Banking Facility” which would generate 400% returns for investors by engaging in loans and other banking services.  The SEC further alleges that Defendant made material misstatements regarding the relationship between the LLC and the Federal Reserve System, the safety of investments, nature ... Continue Reading

SEC v. Gannon Giguiere, et al. (S.D. Cal. July 6, 2018, Contested)

Action against Defendants, individuals, in connection with a variety of alleged market manipulation schemes to profit from three “penny stocks.”  The SEC alleges that the Defendants engaged in multiple schemes including a matched trading scheme, a “pump and dump” scheme, and failing to disclose liquidation of shares while promoting the same shares.  Parallel criminal actions have been announced.

SEC Complaint

SEC Litigation Release ... Continue Reading

SEC v. Moddha Interactive, Inc., et al. (D. Haw. July 6, 2018, Contested)

Action against Defendants, a company, its sole owners, and an unregistered broker-dealer, in connection with an alleged scheme to solicit investment in unregistered securities through a series of material misrepresentations.  The SEC alleges that the individual Defendants made material misrepresentations on the quantity, value, and nature of patents that Moddha Interactive, Inc. supposedly owned.  The SEC further alleges that the individual Defendants used investor money for personal expenses.

SEC Complaint

SEC Litigation Release ... Continue Reading

SEC v. The Owings Group, LLC, et al. (D. Md. July 6, 2018, Contested)

Action against Defendants, various investment LLCs, their owner, and sales team members, in connection with an alleged scheme to solicit investment in unregistered securities.  The SEC alleges that Defendants solicited investments in a joint venture, misrepresenting that they had successfully used a technique to profit from bringing companies public.  The SEC further alleges that Defendants misrepresented their own personal experience and knowledge as well as the track record of their public registration technique.

SEC Complaint ... Continue Reading

SEC v. United Development Funding III, LP, et al. (N.D. Tex. July 3, 2018, Settled)

Action against Defendants, a family of investment funds and various fund officers, for alleged misrepresentations in connection with the use of investment funds.  The SEC alleges that Defendant funds borrowed from each other without proper disclosure and that investor funds were used to pay back previous inter-fund loans rather than for investment purposes.  Defendants have agreed to pay a total of $8.2 million in disgorgement, prejudgment interest, and civil penalties.

SEC Complaint

SEC Litigation Release ... Continue Reading

SEC v. Edward Lee Moody Jr., et al. (E.D. Va. July 3, 2018, Contested)

Action against Defendants, an investment advisor firm and its owner, in connection with an alleged Ponzi scheme.  The SEC alleges that Defendant misrepresented the success of his investment firm, sending periodic payments to previous investors based on new investor funds, and creating fictitious account statements.  The SEC further alleges that the Defendant used the investment funds for personal expenses.

SEC Litigation Release ... Continue Reading

SEC v. T.J. Jesky and Mark F. Destefano (S.D.N.Y. July 2, 2018, Settled)

Action against Defendants for allegedly selling stock in a Hong Kong blockchain company, UBI Blockchain Internet, Ltd., at a higher value than permitted under the registration statement.  The SEC alleges that Defendants were only permitted to sell stock at a fixed price, but sold the stock at market prices instead.  Defendants have agreed to pay $1.4 million in disgorgement and $188,682 in civil penalties.  Earlier this year, the SEC temporarily suspended trading in these securities ... Continue Reading

SEC v. Curative Biosciences, Inc., et al. (C.D. Cal. June 29, 2018, Contested)

Action against Defendants, a company, its former chairman, his wife, and a media advertising consultant, for alleged fraudulent misrepresentations.  According to the SEC, Defendants represented that company had issued shares to third parties in compensation for services and in discharge of company debt but instead issued the shares for capital-raising purposes in violation of the offering registration requirements.  Defendant consultant has agreed to a penny stock ban and to pay disgorgement of $32,203.95 and prejudgment ... Continue Reading

SEC v. Donato J. Dandreo III (D. Mass. June 29, 2018, Settled)

Action against Defendant, a real-estate developer, for allegedly making false statements in connection with raising funds from potential investors.  According to the SEC, Defendant allegedly made misrepresentations in order to finance the construction of residential homes through his real-estate development company.  In addition, the SEC alleges that Defendant claimed to have raised approximately $1.5 million from investors, despite raising no funds.  Respondent has agreed to pay a civil penalty of $9,239.

SEC Litigation Release  

SEC ... Continue Reading

In re Bruce A. Hauptman, et al. (A.P. June 29, 2018, Settled)

Action against Respondent, an investment advisor and sole owner of an investment fund, in connection with alleged misappropriation of investor funds.  The SEC alleges that Respondent made material misrepresentations regarding fund performance and management fees to investors and in his disclosures, and used investment funds for personal expenses.  Respondent has agreed to pay disgorgement of $121,026.49, prejudgment interest of $20,417.35, and a civil penalty of $160,000.

SEC Order

SEC Press Release ... Continue Reading

SEC v. James VanBlaricum, et al. (N.D.T.C. June 26, 2018, Settled)

Action against Defendants, seven individuals, in connection with an alleged oil-and-gas Ponzi scheme.  The SEC alleges that Respondents raised funds by guaranteeing investment returns and promising investors that their funds would be used to drill oil wells, but instead misappropriated investor funds for personal expenses.  One Defendant has agreed to pay $33,000 in disgorgement, while three others have agreed to officer and director bars.  Five Defendants pleaded guilty in a parallel criminal case and have ... Continue Reading

SEC v. Santillo, et al. (S.D.N.Y. June 19, 2018, Contested)

Action against Defendants, three companies and several of their officers and employees, in connection with an alleged Ponzi scheme.  According to the SEC, Defendants falsely told investors that their funds would be invested in Defendant companies, and some investors were falsely guaranteed dividends or large returns.  The SEC alleges that Defendants misappropriated investor funds for personal expenses, made Ponzi-like payments to earlier rounds of investors, and transferred funds in transactions unrelated to the issuers’ purported ... Continue Reading

SEC v. Joseph A. Fiore, et al. (S.D.N.Y. June 18, 2018, Contested)

Action against Defendants, a penny stock financier and two companies he controlled, for their alleged roles in a fraudulent market manipulation and scalping scheme.  The SEC alleges that Defendant financier engaged in market manipulation and illegally sold microcap issuer stock by making false and misleading statements to brokerage firms where he traded that stock and recommending purchase of the stock while failing to disclose his beneficial ownership of the stock and plans to sell a ... Continue Reading

CFTC v. Omega Knight 2, LLC, et al. (S.D. Fla. June 13, 2018, Contested)

Action against Defendants, a purported precious metals retailer and its employees, in connection with an alleged scheme to defraud retail customers.  The CFTC alleges that Defendants fraudulently induced customers into investing at least $5.5 million in precious metals transactions, but failed to use all the funds they collected in support of such transactions.  The CFTC further alleges that Defendants wired the proceeds of these transactions to the employees’ accounts for personal use.

CFTC Complaint

CFTC ... Continue Reading

CFTC v. Mark Olsen Mining Co., et al. (S.D. Fla. June 12, 2018, Contested)

Action against Defendants, a purported precious metals retailer and its employee, in connection with an alleged scheme to defraud retail customers.  The CFTC alleges that Defendants received payments amounting to at least $870,000 for precious metals, but never delivered the underlying assets.  The CFTC further alleges that Defendants wired the proceeds of these transactions to employees’ accounts for personal use.

CFTC Complaint

CFTC Press Release ... Continue Reading

SEC v. Ralph T. Iannelli, et al. (C.D. Cal. June 6, 2018, Contested)

Action against Defendants, an equipment leasing company and its founder, for allegedly defrauding investors in connection with sales of promissory notes. The SEC alleges that Defendant company made false and misleading statements to induce investors to contribute their clients’ funds to the company.  The SEC further alleges that Defendant company provided an investment adviser with fake financial statements and told another investment adviser that Defendant company would assign leases to its clients when the same ... Continue Reading

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