BREAKING NEWS: SEC Attacks ANOTHER Alleged Florida Ponzi And Affinity-Fraud Scheme; FBI Investigating Amid Report Indictments Alleging Securities Fraud, Wire Fraud, Money-Laundering And Conspiracy Have Been Unsealed
UPDATED 2:03 P.M. EDT (U.S.A.) The Securites and Exchange Commission — which announced yesterday that it had broken up a $22 million Ponzi scheme in Florida — announced today that it was working with the FBI to break up yet another Ponzi scheme in the Sunshine State.
The newest scheme was targeted at Haitian-Americans who were promised investment returns of 100 percent every 90 days, the SEC said.
It was not immediately clear when the criminal indictments would become available for public viewing, but the SEC said the indictments were unsealed this morning in Florida.
Charged civilly by the SEC were HomePals Investment Club LLC and HomePals LLC (Home Pals), and their principals, Ronnie Eugene Bass Jr., Abner Alabre and Brian J. Taglieri.
Bass, Alabre and Taglieri are charged criminally with securities fraud, conspiracy to commit securities fraud, wire fraud and money laundering, the SEC said.
â€œThe extraordinary promises made by these three men spread by word of mouth throughout a close-knit community,â€ said Glenn Gordon, associate director of the SECâ€™s Miami Regional Office. â€œBass presented himself as a master trader of stock options and commodities, when in reality he was a master of deceit.â€
Victims resided primarily in South Florida, the SEC said.
At least $14.3 million was raised in the scheme, which gathered money from as many as 64 “investment clubs,” the SEC said.
“By the end of December 2008, HomePals had only $7,300 left and stopped making payments to investors,” the SEC alleged.
On its website, Home Pals claimed “[i]nvestments of $25,000 or more earn higher interest rates.”
“The defendants claimed they were able to generate such spectacular returns through Bassâ€™ purported successful trading of stock options and commodities,” the SEC alleged.
“[I]n reality, Bass traded no more than $1.2 million of the $14.3 million raised, generated trading losses of 19 percent, and . . . HomePals used the bulk of the investor funds to repay earlier investors in typical Ponzi scheme fashion.”
Bass, Alabre and Taglieri misappropriated at least $668,000 of investor funds for personal use, the SEC said.
The defendants told one lie after another, the SEC said. Among the lies was that investors were protected by a $25 million insurance policy.
Another lie was that returns were guaranteed, the SEC said.
Yet another — allegedly told by Bass and Taglieri — was that that Taglieri was HomePals’ attorney.
“This representation was false because Taglieri is not an attorney,” the SEC said.
Home Pals advised website viewers that the company was “honest” and adhered to “uncompromising ethics.”
“We guarantee realistic, honest financial strategies that achieves results. We will lead you on a course to financial freedom. Our years of experience and notable expertise ensure that your financial future is in good hands,” Home Pals said.
“Our consistent track record of uncompromising ethics instills confidence and trust,” Home Pals told viewers.
The SEC saw things differently.
“Bass and Alabre used at least $380,000 to pay for a house where they both resided until recently,” the SEC alleged. “Bass misappropriated an additional $28,000 for himself, part of which he used to purchase an automobile.
“HomePals also distributed approximately $28,000 to Alabre as ‘compensation,’” the SEC continued. “Additionally, Taglieri received an undisclosed salary of $8,000 per month, and diverted $85,000 of investor funds to pay his overdue child support obligations.”
Read the SEC complaint.