Among recent enforcement actions by the Securities and Exchange Commission were charges against a Boston resident for conducting a Ponzi scheme claiming to offer “bridge loans” to Jamaican businesses, a California businessman accused of stealing investor assets, a muni advisor and a microcap CEO.
$10 Million Ponzi Scheme Promised Bridge Loans to Jamaican Businesses
The SEC has charged former Boston resident Mark Jones, who now lives in Miami and has a second home in Jamaica, with operating a $10 million Ponzi scheme that claimed to generate profits from “bridge loans” to businesses in Jamaica.
According to the agency, in about 2007, Jones started to solicit investors, telling them their money would be pooled and used for bridge loans to Jamaican businesses waiting for funds from approved commercial bank loans. Jones claimed the bridge loans would bring investors annual interest of 15% to 20%.
He even appeared in YouTube videos touting investment opportunities in Jamaica and met with some investors in Jamaica to show local projects they had purportedly funded. His efforts raised about $10 million from at least 21 investors in six states and Washington, D.C., including three of his own relatives.
But Jones used investors’ money to pay other investors — the hallmark of a Ponzi scheme — and also used some investors’ money to pay his personal expenses. Many of Jones’s victims are retirees now in financial straits thanks to those “investments.”
The SEC obtained a court order freezing Jones’s assets, as well as an order to repatriate investor funds that were moved overseas. The agency seeks a permanent injunction, return of allegedly ill-gotten gains with interest, and penalties.
SEC Charges California Real Estate Investor With Fraud
California businessman Daniel Nase was charged with fraud by the SEC after he raised money from investors through an unregistered offering of common stock in his Bakersfield, California-based company, BIC Real Estate Development Corp., and then used that money for personal expenses.
According to the agency, Nase, who was not registered with the SEC or any state regulator to sell investments, told investors that BIC would invest in real estate and promissory notes. With money he used to purchase real estate and notes, Nase improperly titled most of the properties in his name or his wife’s name or their family trust, not BIC. He also used some investor funds to pay for clothing, vacations, student loans and other personal expenses.
Once he found out about the SEC’s investigation, Nase tried to cover up his theft by investing stolen assets back into the company to make it look as if he was increasing his equity stake in it.
Nase and BIC have been charged with violating federal antifraud laws and rules and securities registration provisions. The SEC is seeking emergency relief in the form of a temporary restraining order, asset freeze, and a preliminary injunction. It also seeks the return of allegedly ill-gotten gains, along with interest, penalties and other relief.
Municipal Advisor Fined Over Conflict of Interest