Advisor Charged With Fraud for Investing Client Money in Turkish Scam

Ausdal and Duncan’s attorney, Charles Dolan of the Raipher, P.C. law firm in Springfield, Massachusetts, didn’t immediately respond to requests for comment.

The “so-called opportunity” that Duncan presented to his clients “consisted of sending funds to Turkey based on an elaborate hoax,” according to the SEC’s complaint against him. Duncan told his clients and various third parties that a woman living in Turkey expected to inherit as much as $6 million from her dead father, and claimed that he would be able to manage that money if he provided the woman with money for legal expenses, the SEC said. Duncan steered at least two elderly retail investors to invest in the “illusory jackpot, promising them a return of as much as 100% if they helped to secure the release of the funds,” according to the complaint. One of his longtime clients provided about $250,000, while another client gave $28,100, and the money was sent to several people in Turkey and the U.S. who were supposedly helping the woman in Turkey, the SEC charged.

Duncan’s clients still haven’t received any of the promised returns on their investment, according to the complaint. Instead, their money was “lost to this international scam,” the SEC said in the complaint.

“As an investment adviser, Duncan owed his advisory clients an affirmative duty of the utmost good faith, and he was required to make full and fair disclosure of all material facts and to employ reasonable care to avoid misleading his clients,” the SEC said, adding: “Leaving aside the facial implausibility of the story, Duncan failed to obtain any documentation establishing the identity of the woman in Turkey and confirming the existence of legal proceedings involving the estate of the woman’s father. He failed to obtain any documentation memorializing any financial interest that his clients received in the purported estate. He also ignored — and failed to inform his clients about — several bright red flags, including warnings from two banks that the Turkish investment opportunity was probably a scam.”

The SEC is seeking a permanent injunction that restrains Duncan, along with his “agents, servants, employees, attorneys, and other persons in active concert or participation with them,” it said in the complaint. The SEC also wants the court to require Duncan to “disgorge his ill-gotten gains, plus prejudgment interest, with said monies to be distributed in accordance with a plan of distribution to be ordered” by the court, it said.