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

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SEC v. David Sims, et al. (C.D. Cal. May 23, 2019, Contested)

Action against Defendants, president of an equities company, his partner, three companies that they controlled, and their lawyer, for alleged fraud on investors. According to the SEC, Defendant president and Defendant partner falsely told investors that their funds would be invested in non-existent financial instruments and large currency trading platforms. The SEC alleges that Defendants misappropriated investor funds and that Defendant lawyer aided and abetted the fraud.

SEC Complaint

SEC Litigation Release
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SEC v. Savraj Gat-Aura (a/k/a Samuel Aura a/k/a/ Sam Aura) and Core Agents, Ltd. (d/b/a Core Agents International, Ltd) (S.D.N.Y. May 23, 2019, Contested)

Action against Defendants, a representative of an office space rental company and a company that he used to recruit sales agents, for alleged aiding and abetting of a fraudulent investment scheme. According to the SEC, Defendant representative provided false and misleading materials to sales agents in order to recruit them to sell fraudulent investments in the rental company. Defendant representative has been charged in a parallel criminal action.

SEC Complaint

SEC Litigation Release
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SEC v. Robert C. Morgan, et al. (W.D.N.Y. May 22, 2019, Contested)

Action against Defendants, a real estate developer, his fund management company, and his acquisition company, for alleged misappropriation of investor funds. According to the SEC, Defendants secured investors by falsely representing that their funds would be used to purchase real estate. The SEC alleges that Defendants instead used investor funds to pay off other investors and unrelated loans.

SEC Complaint

SEC Litigation Release 

SEC Press Release
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SEC v. Daniel Pacheco (C.D. Cal. May 22, 2019, Contested)

Action against Defendant and Relief Defendants, the controlling member of a marketing company, one other individual, and five LLCs, for an alleged pyramid scheme and unregistered offering of securities. According to the SEC, Defendant sold instructional e-commerce packages that he falsely represented would allow investors to obtain cryptocurrency rebates and recruitment bonuses. The SEC alleges that Defendant failed to pay these rebates and bonuses and instead misappropriated investor funds.

SEC Complaint

SEC Litigation Release

SEC
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SEC v. David N. Osegueda, et al. (C.D. Cal. May 20, 2019, Contested)

Action against Defendants, a real estate agent, a beverage marketer and developer, a corporate consultant and promoter, and a bank employee, for an alleged pump-and-dump scheme. According to the SEC, Defendants artificially increased the stock price and trading volume of a beverage and cannabis company owned by two of the Defendants by promoting the company through false and misleading statements. The SEC alleges that once the price and trading volume of the stock artificially rose,
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SEC v. Andrew I. Farmer, et al. (S.D. Tex. May 15, 2019, Settled)

Action against Defendants, five individuals, for an alleged pump-and-dump scheme. According to the SEC, Defendants promoted penny stocks in companies that they controlled and participated in coordinated trading between these companies to imitate market interest and increase share prices. The SEC alleges that Defendants then sold the penny stocks when the price artificially rose. Defendants have agreed to pay total disgorgement of $10.25 million and prejudgment interest of $895,487. Defendants have also pleaded guilty in
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SEC v. Collector’s Coffee, Inc., d/b/a Collectors Café and Mykalai Kontilai (S.D.N.Y. May 14, 2019, Contested)

Action against Defendants, a collectibles auction company and its CEO, for alleged fraud on investors.  According to the SEC, Defendants solicited investments based on false claims about its inventory and the number of dealers signed up with the Defendant company.  The SEC also alleges that Defendant CEO misappropriated investor funds to pay for personal expenses and provided falsified documents to the SEC.

SEC Complaint

SEC Litigation Release
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In re NextBlock Global Ltd. and Alex Tapscott (A.P. May 14, 2019, Settled)

Action against Respondents, a blockchain company and its principal, for alleged offering fraud. According to the SEC, Respondents solicited investor funds based on false claims that prominent members of the blockchain community served as advisors to Respondent company. Respondent principal has agreed to pay a civil penalty of $25,000. The SEC did not impose a penalty on Respondent company due to its payment of approximately $520,000 under a settlement agreement with the Ontario Securities Commission.
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SEC v. Natural Diamonds Investment Co., et al. (S.D. Fla. May 13, 2019, Contested)

Action against Defendants, a diamond company, an investment company, a cryptocurrency platform, and three of their owners and executives, for an alleged Ponzi scheme.  According to the SEC, Defendants offered investment opportunities in diamond sales and a diamond-backed cryptocurrency that they claimed was risk free.  The SEC alleges that Defendants instead misappropriated these funds to pay other investors and for their own personal expenses.

SEC Complaint 

SEC Litigation Release 

SEC Press Release
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SEC v. James Siniscalchi (S.D.N.Y. Apr. 29, 2019, Contested)

Action against Defendant, the chief compliance officer of a ticket resale company, for alleged misappropriation of investor funds. According to the SEC, Defendant’s company represented to investors that their funds were used to purchase Broadway musical and sporting event tickets and resell them at a profit, when Defendant and his business partners in fact used the funds for their personal benefit. The SEC alleges that Defendant also concealed the involvement of his cousin in the
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SEC v. Christopher D. Dougherty, et al. (S.D. Cal. Apr. 26, 2019, Contested)

Action against Defendants, an investment adviser and his three companies, for an alleged Ponzi scheme. According to the SEC, Defendants solicited investment advisory clients to invest in various entities under Defendant adviser’s control but instead misappropriated client funds for personal expenses and to pay off existing investors.

SEC Complaint 

SEC Litigation Release
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In re Prosper Funding LLC (A.P. Apr. 19, 2019, Settled)

Action against Respondent, a marketplace lender, for alleged misstatements related to annualized net returns. According to the SEC, Respondent erroneously excluded certain securities in its returns calculation and did not correct the error, despite the fact that investors complained about possible problems with the calculations. Respondent has agreed to pay a civil penalty of $3 million.

SEC Order
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SEC v. David M. Loflin (D. Ariz. Apr. 19, 2019, Settled)

Action against Defendant, a business partner of the controlling shareholder of a public company, for his alleged role in an unregistered offering and pump-and-dump scheme. According to the SEC, Defendant and his partner falsified documents and misled the company’s transfer agent and a brokerage in order to obtain stock certificates without restrictive legends, which would have required the company to file a registration statement or be exempt from doing so. The SEC further alleges that
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SEC v. Kimberly Sredich (E.D. Mich. Apr. 18, 2019, Contested)

Action against Defendant, a former sales assistant at a registered broker-dealer, for alleged misappropriation of funds from brokerage customers. According to the SEC, Defendant used the proceeds of sales of securities for personal expenses. The SEC alleges that Defendant also falsified customer signatures on letters of authorization to move funds to her personal bank account. Defendant has been charged in a parallel criminal case.

SEC Complaint 

SEC Litigation Release
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SEC v. Ivan Acevedo and Dane R. Roseman (S.D. Fla. Apr. 12, 2019, Contested)

Action against Defendants, two former directors of investment at the Woodbridge Group of Companies LLC, for alleged fraud.  According to the SEC, Defendants, who were not registered with the SEC, fraudulently marketed securities in a $1.2 billion Ponzi scheme and misappropriated investor funds.  In January 2019, the Southern District of Florida ordered Woodbridge Group of Companies LLC and its owner to pay disgorgement of $892 million, among other remedies.  Defendant directors have been charged in
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SEC v. Gonzalo Ortiz (S.D.N.Y. Apr. 9, 2019, Contested)

Action against Defendant, an unregistered day trader, for alleged fraud. According to the SEC, Defendant solicited an investor’s funds by making material misrepresentations about possible returns and prior investment success. The SEC alleges that Defendant misappropriated the funds and concealed losses from the investor. Defendant has been charged in a parallel criminal case.

SEC Order

SEC Litigation Release
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SEC v. Alexander Bevil, et al. (D. Nev. Apr. 8, 2019, Partially Settled, Partially Contested); SEC v. Paula Marie Saccomanno and Dennis Swerdlen (S.D. Fla. Apr. 8, 2019, Contested); SEC v. Michael Allen Duke, et al. (N.D. Tex. Apr. 8, 2019, Partially Settled, Partially Contested); SEC v. Joel Craig Duncan (W.D. Tex. Apr. 8, 2019, Contested)

Actions against Defendants, 15 individuals, for alleged offering fraud and acting as unregistered brokers, or aiding-and-abetting these activities. According to the SEC, a management consulting company hired Defendants to cold-call retail investors and solicit investments in the company’s stock. The SEC alleges that Defendants were not registered as brokers and failed to disclose to investors that they were earning high sales commissions. The SEC further alleges that the offering itself was not registered. Eleven Defendants
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SEC v. Jeffrey E. Wall and The Lighthouse Events, LLC (D. Me. Apr. 4, 2019, Contested)

Action against Defendants, a music promoter and his company, for alleged offering fraud. According to the SEC, Defendants solicited investor funds based on false claims regarding use and repayment of the funds. The SEC alleges that Defendants misappropriated the funds for purposes including debt repayment and Ponzi-like payments to earlier investors.

SEC Complaint

SEC Litigation Release
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SEC v. Motty Mizrahi and MBIG Company (C.D. Cal. Apr. 1, 2019, Contested)

Action against Defendants, a money manager and his company, for alleged fraud. According to the SEC, Defendants solicited investor funds with false claims of guaranteed returns, used the money to fund an unsuccessful options trading strategy and for personal expenses, and concealed the losses by falsifying account statements. Defendant manager has been charged in a parallel criminal case.

SEC Complaint

SEC Litigation Release
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SEC v. Keith Borge (S.D.N.Y. Mar. 28, 2019, Contested)

Action against Defendant, a former controller of a not-for-profit college, for alleged fraud related to the state of the college’s finances. The SEC alleges that Defendant falsified financial records, failed to file certain tax submissions, and failed to determine the likelihood that pledged donations would still be received in an effort to hide the school’s worsening financial performance from municipal bond investors.

SEC Complaint

SEC Press Release
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SEC v. Keith Borge (Mar. 28, 2019, Contested)

Action against Defendant, the former controller of a not-for-profit college, for alleged fraud. According to the SEC, Defendant falsified the college’s financial documents, resulting in an overstatement of net assets, and made misrepresentations to his supervisors and the college’s board of trustees about the finances. The SEC alleges that Defendant’s misstatements influenced purchases and sales by investors in the college’s bonds. Defendant has been charged in a parallel criminal case.

SEC Complaint

SEC Litigation Release
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SEC v. Carol Ann Pedersen (C.D. Cal Mar. 20, 2019, Contested)

Action against Defendant, a former CPA and unregistered investment adviser, for an alleged Ponzi scheme. According to the SEC, Defendant falsely represented to investors that their funds would be invested in “federally guaranteed” securities and falsified account statements. The SEC alleges that Defendant misappropriated investor funds for payments to other investors and for personal use. Defendant has pleaded guilty in a parallel criminal action.

SEC Complaint

SEC Litigation Release
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