Ponzi Schemer Blames Mysterious One-Eyed Man; Uses Profits to Give Prostitutes a ‘Better Life’

According to the SEC’s complaint filed in federal court in Denver, the scheme occurred between February 2010 and February 2011, and the securities offered were never registered with the SEC as required under the federal securities laws. Lunn, Bishop and Curry told investors that Dresdner offered 100% guaranteed rates of return through a process involving the lease and monetization of bank instruments. “Curry and Bishop marketed the program directly to potential investors through phone calls, emails and other communications,” the SEC says, while “Lunn held conference calls with marketers and investors to explain the workings of the program.”

According to the SEC’s complaint, Lunn admitted in sworn testimony during the SEC’s investigation that “it was a con, basically.” Lunn admitted that he did not lease any bank instruments, obtain any insurance wraps, monetize any bank instruments or place any money into trading platforms as represented to investors. Nor did he return the money to investors.

When Lunn, Bishop and Curry were unable to repay investors after the promised 10 to 12 days, they perpetuated the scheme by repeatedly postponing the payout dates and claiming the delays were due to holds placed by banks or the government, the SEC says. The SEC alleges that Lunn did not invest any investor funds as promised and instead began making cash withdrawals after the very first investor deposit. In October 2010, Lunn began making payments to three women he met in Las Vegas whom he described as “call girls.” Lunn testified that he gave at least $848,500 to the three women so that they could have “a better type of life.”

In November 2010, the SEC says that Lunn used investor money to make a $1 million Ponzi-like payment to a favored investor who he thought “was a deserving person.” Lunn paid $1.3 million to marketers of the scheme, including more than $650,000 to Bishop and Curry. Lunn used the remaining investor funds to pay for his personal and business expenses.

Regarding the one-eyed man, the SEC’s complaint said, “Lunn testified that Perello told him that he named the program accordingly because ‘when people found out they’d been ripped off, they would buy a .44 Magnum and shoot themselves in the head.’ Lunn claimed that Perello threatened to kill him and his family if he did not cooperate in the Dresdner scheme, and that he gave the cash he withdrew from investor funds and the Western Union transfers to Perello. Lunn is the only person who claims to have met Perello in person, saying he does not know Perello’s true identify or current whereabouts and that his only distinguishing characteristic is that he has just one eye.”

Despite Lunn’s assertions, the SEC says that no individual resembling Perello has been identified or located.