MLM Firm Credit USA Inc. Hammered By State Attorneys General Amid Pyramid Scheme, Securities Allegations; Terrel Alexander, Nicole Alexander, William Love III Indicted
Credit USA purportedly sold credit-repair and “identity protection” services, and operated the company to enrich three criminal defendants unjustly, prosecutors said.
Criminal indictments were handed up in Delaware against Terrel Alexander, 41, of Wilmington, Nicole Alexander, 41, and William Love III, 39, of Mount Laurel, N.J. The criminal charges were brought by the office of Delaware Attorney General Beau Biden.
Among the charges were racketeering, conspiracy to commit racketeering, securities fraud, theft, selling unregistered securities and conducing business as unregistered brokers or agents.
Meanwhile, New Jersey Attorney General Paula T. Dow sued the company and Terrel and Nicole Alexander amid allegations of selling unregistered stock and transacting in securities without being registered. Nicole Alexander is the ex-wife of Terrel Alexander.
â€œWeâ€™re taking action on behalf of the investors who suffered losses when these defendants allegedly broke our state securities laws,â€ Dow said.
New Jersey officials estimated that “at least 100 investors” paid Credit USA for “shares” in the firm.
Part of the scheme was to entice prospects to purchase shares priced between $7 and $15 “before the company goes public on the stock exchange,” prosecutors said.
Credit USA sold at least 28,000 shares of unregistered stock to at least 100 investors who forked over more than $125,000, prosecutors said. The scheme was selling shares as recently as September 2009, according to court filings.
Shares were sold in “lots” of 100 to members, associates and “proposed officers” of the MLM firm, prosecutors said.
“The investors included people who had paid to become ‘members’ of Credit USA and ‘associates,’ members who had paid an additional fee that allowed them to sell Credit USA services to others,” New Jersey officials said.
â€œI applaud the coordination among the states to thwart this operation,” said Marc B. Minor, chief of the N.J. Bureau of Securities. “Credit USAâ€™s sale of unregistered stock highlights the public’s need to be more vigilant and to check with the Bureau before investing in order to avoid being victims.â€
Authorities said Credit USA was headquartered at Two Penn Center Plaza in Philadelphia from August 2005 to May 2007. Beginning in June 2007, Credit USA operated at One Cherry Hill, Suite 400, Cherry Hill, New Jersey. The company was registered in Delaware.
Beau Biden, the Delaware attorney general, is the son of U.S. Vice President Joseph Biden. The younger Biden only recently returned to duty after suffering what was described in May as a minor stroke.
One of Biden’s first official duties after returning to work was to announce the indictments against the Alexanders and Love III.
If convicted of all counts in the criminal case, the defendants each face up to 76 years in prison.