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August 30, 2011 at 09:27 AM
The Securities and Exchange Commission announced Monday that it has charged two Florida men for running a Ponzi scheme that robbed more than 100 investors of $22 million.
The scheme, which purported to be a private equity fund and was marketed under the names “Managed Capital Fund,” “Safe Harbor Private Equity Fund” and “Preservation of Principal Fund”, was run by James Davis Risher; Daniel Joseph Sebastian distributed offering materials and solicited investors, the SEC’s complaint charges.
Risher claimed to have a retail brokerage business with “substantial experience” in trading equities, and wealth management and asset management services, the SEC says. On the contrary, the commission alleges, Risher spent 11 of the last 21 years in state and federal prisons for “numerous crimes including securities and mail fraud.”
“Risher, who masqueraded as a highly successful equity trader, teamed up with Sebastian to tout sophisticated trading strategies they claimed would generate substantial profits for investors,” Eric Bustillo, director of the SEC’s Miami Regional Office, said in a statement. “Instead, Risher and Sebastian used investors’ life savings and retirement nest eggs to line their own pockets.”
Between January 2007 and July 2010, Risher and Sebastian solicited investors, including teachers, retirees and members of several Florida churches, by promising annual returns between 14% and 124%. Sebastian also solicited investors in other states and Canada. He provided investors with fake fund-offering materials, newsletters and a DVD with video testimonials about Sebastian and Safe Harbor.
