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SEC Halts Ponzi Scheme Targeting Deaf Investors

February 20, 2009 By Paul (Founder, WorkAtHomeTruth) 1 Comment

2/17/2009 S.E.C. Press Release:

Washington, D.C., Feb. 19, 2009 — The Securities and Exchange Commission has obtained a court order halting a Ponzi scheme that specifically targeted members of the Deaf community in the United States and Japan.
Additional Materials

* Litigation Release No. 20906
* SEC Complaint

The SEC alleges that Hawaii-based Billion Coupons, Inc. (BCI) and its CEO Marvin R. Cooper raised $4.4 million from 125 investors since at least September 2007 by, among other things, holding investment seminars at Deaf community centers. The SEC also alleges that Cooper misappropriated at least $1.4 million in investor funds to pay for a new home and other personal expenses. The order obtained by the SEC freezes the assets of BCI and Cooper.

“This emergency action shows that the Commission will act quickly and decisively to help victims of affinity fraud,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.

“A Ponzi scheme targeting members of the Deaf community is particularly reprehensible,” said Rosalind R. Tyson, Regional Director of the SEC’s Los Angeles Regional Office. “This case is an example of successful coordination between federal and state agencies to protect vulnerable investors.”

The SEC’s complaint, filed yesterday in federal court in Honolulu, alleges that BCI and Cooper represented to the investors that their funds would be invested in the foreign exchange (Forex) markets, that investors would receive returns of up to 25 percent compounded monthly from such trading, and that their investments were safe. According to the complaint, BCI and Cooper actually used only a net $800,000 (cash deposits minus cash withdrawals) of investor funds for Forex trading, and they lost more than $750,000 from their Forex trading. The complaint further alleges that BCI and Cooper failed to generate sufficient funds from their Forex trading to pay the promised returns, and instead operated as a Ponzi scheme by paying returns to existing investors from funds contributed by new investors.

The SEC alleges that BCI and Cooper have violated the registration and antifraud provisions of the federal securities laws. In its lawsuit, the SEC obtained an order temporarily enjoining BCI and Cooper from future violations of these provisions. The SEC also obtained an order: (1) freezing the assets of BCI and Cooper; (2) appointing a temporary receiver over BCI; (3) preventing the destruction of documents; (4) granting expedited discovery; and (5) requiring BCI and Cooper to provide accountings. The Commission also seeks preliminary and permanent injunctions, disgorgement, and civil penalties against both defendants. A hearing on whether a preliminary injunction should be issued against the defendants and whether a permanent receiver should be appointed is scheduled for March 2, 2009, at 9 a.m. HST.

The Commodity Futures Trading Commission (CFTC) also filed an emergency action yesterday against BCI and Cooper, alleging violations of the antifraud provisions of the Commodity Exchange Act. The State of Hawaii’s Department of Commerce and Consumer Affairs (DCCA), Office of the Commissioner of Securities, issued a preliminary order to cease and desist against BCI and Cooper.

The Commission acknowledges the assistance of the Hawaii DCCA’s Office of the Commissioner of Securities and the assistance of the CFTC in this matter.

# # #

For more information, contact:

Andrew Petillon
Associate Regional Director, Los Angeles Regional Office
(323) 965-3214

Kelly Bowers
Senior Assistant Regional Director, Los Angeles Regional Office
(323) 965-3924

John B. Bulgozdy
Senior Trial Counsel, Los Angeles Regional Office
(323) 965-3322

http://www.sec.gov/news/press/2009/2009-30.htm


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SEC Brings Emergency Action to Halt Ponzi Scheme and Affinity Fraud Targeting Clergy, Catholics And Senior Citizens

January 10, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

1/8/2009 S.E.C. litigation release:

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20848 / January 8, 2009
SEC v. Gen-See Capital Corp. and Richard S. Piccoli, 09 CV 0014 S (W.D.N.Y.)
SEC Brings Emergency Action to Halt Ponzi Scheme and Affinity Fraud Targeting Clergy, Catholics And Senior Citizens

The Securities and Exchange Commission announced today that it has filed an emergency civil enforcement action to halt an ongoing affinity fraud and Ponzi scheme orchestrated by Buffalo-based Gen-See Capital Corporation a/k/a Gen Unlimited (“Gen-See”) and its owner and president, Richard S. Piccoli.

According to the Commission’s complaint, the defendants have raised millions of dollars from investors by promising steady, “guaranteed” returns, ranging from 7.1% to 8.3% per annum, and no fees or commissions. In November 2008 alone, the defendants raised over $500,000 from investors. The defendants have relied heavily on advertisements in newsletters published by churches and dioceses. The complaint further alleges that the defendants told investors that their money was invested in “high quality” residential mortgages that the defendants were able to purchase at a discount. The defendants did not invest the funds as promised, but instead used new investor funds to make payments to earlier investors. In addition, the complaint alleges that Gen-See’s offering and sale of securities to the public was not registered with the Commission.

The complaint alleges that the defendants violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

The Commission seeks, among other emergency relief, a temporary restraining order (i) enjoining the defendants from future violations of the federal securities laws; (ii) freezing the defendants’ assets; (iii) directing the defendants to provide verified accountings; and (iv) prohibiting the destruction, concealment or alteration of documents. In addition to this emergency relief, the Commission seeks preliminary and permanent injunctive relief and civil money penalties against the defendants as well as disgorgement by the defendants of their ill-gotten gains plus prejudgment interest.

The Commission’s investigation is continuing. The Commission acknowledges the assistance of the United States Attorney’s Office for the Western District of New York and the United States Postal Inspection Service in this matter.

SEC Complaint in this matter
Additional Information for Gen-See Investors

http://www.sec.gov/litigation/litreleases/2009/lr20848.htm

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SEC HALTS $23 MILLION PONZI SCHEME AND AFFINITY FRAUD TARGETING HAITIAN-AMERICAN INVESTORS

December 30, 2008 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

Litigation Release from the S.E.C.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20840 / December 30, 2008

Securities and Exchange Commission v. Creative Capital Consortium, LLC, et. al., Case No. 08-81565-CIV-Hurley/Hopkins (S.D. Fla., filed December 29, 2008)

SEC HALTS $23 MILLION PONZI SCHEME AND AFFINITY FRAUD TARGETING HAITIAN-AMERICAN INVESTORS

The United States Securities and Exchange Commission announced that on December 29, 2008, it filed an emergency action to halt a Ponzi scheme and affinity fraud conducted by Creative Capital Consortium, LLC and A Creative Capital Concept$, LLC (collectively, Creative Capital), and its principal, George L. Theodule. According to the Commission’s complaint, the defendants raised at least $23.4 million from thousands of investors in the Haitian-American community nationwide through a network of purported investment clubs Theodule directs investors to form. Also on December 29, 2008 Judge Donald M. Middlebrooks, U.S. District Judge for the Southern District of Florida, issued an order placing Creative Capital under the control of a receiver to safeguard assets, as well as other emergency orders, including temporary restraining orders and asset freezes.

The Commission’s complaint alleges that starting in at least November 2007, Theodule, directly and through Creative Capital, raised at least $23.4 million from thousands of investors, mostly Haitian-Americans. As part of the scheme, the defendants direct investors to form investment clubs solely for the purpose of funneling funds to Theodule and Creative Capital. Theodule solicits investors for Creative Capital by guaranteeing a 100% return on their investment within 90 days based on his claimed successful trading of stocks and options. The defendants also solicit investors by claiming that Creative Capital’s trading profits are used to fund new business ventures, some of which benefit the Haitian community in the United States and Haiti, and others in Sierra Leone. In truth, Theodule has lost at least $18 million trading stocks and options just over the last year. In addition, Creative Capital merely repaid earlier investors with monies collected from new investors in typical Ponzi scheme fashion. Finally, the Complaint alleges, Theodule has commingled investor funds with his personal funds and misappropriated at least $3.8 million for himself and his family.

The Commission’s complaint further alleges:

  • Defendants’ statements of the safety and security of investor deposits are patently false. Theodule directs prospective investors to form investment clubs with the assistance of a purported self-regulatory agency called Smart Investment Management Services, LLC (SIMS). Defendants tout SIMS’ independent verification of their deposits as an added measure of safety and security. In reality, SIMS is a private company run by a former Creative Capital employee and not a regulatory entity.
  • Defendants’ claim of success trading stocks and options are also false. Of the more than $18 million deposited in brokerage accounts, Theodule has lost approximately 97% of those funds trading stocks and options. In fact, Theodule has consistently lost money trading in those accounts since November 2007, and has never generated net trading profits.
  • Defendants’ claims that Creative Capital’s trading profits were used to fund new business ventures, some of which would benefit the Haitian community in the United States and Haiti, and others in Sierra Leone are false. In reality, there were no trading profits, and most of the funds the Defendants disbursed went to pay earlier investors their purported profits, not fund business projects. Moreover, the Defendants misappropriated millions of dollars of investor funds.

In addition to the emergency relief obtained today, the Commission’s complaint seeks disgorgement of the defendants’ ill-gotten gains, civil penalties, and permanent injunctions barring future violations of the antifraud provisions of the federal securities laws.

Investors are advised to read the Commission’s “Affinity Fraud” Investor Alert, which provides tips on how to avoid being a victim in an affinity fraud. This and other investor alerts can be found on the SEC’s web site, at www.sec.gov/investor/pubs.shtml. The “Affinity Fraud” Investor Alert has also been translated into Creole and posted on the Commission’s website.

The Commission acknowledges the assistance of the State of Florida’s Office of Financial Regulation in connection with this matter.

The SEC’s investigation is continuing.

SEC Complaint in this matter

http://www.sec.gov/litigation/litreleases/2008/lr20840.htm

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