SEC Takes Down Ponzi-Like Operation Involving 230 Investors
The SEC (Securities Exchange Commission) announced today that it has obtained a court order to shut down a major investment operation worth approximately $345 million. According to the SEC complaint, the scheme involved more than 230 investors from the United States and was lead by Kevin B. Merrill and Cameron Jezierski.
The defendants in the case allegedly attracted investors by promising them big returns from the purchase and resale of consumer debt portfolios. As usual in a fraud structured like this, however, the funds were channeled into the pockets of the fund operators themselves while fabricated documents and forged signatures kept investors in the dark about where their money had gone.
The fraudsters allegedly went on the typical spending binges, spending millions on at least 25 luxury and sports cars, millions on goods and services, $330,000 on a diamond ring, and $100,000 on a private fitness club. The list of indulgences goes on and on…
SEC Files Emergency Claim to Halt Ponzi-like Fund’s Operations
In order to stop the leaders of the Ponzi scheme from continuing to defraud investors of millions, the SEC filed an emergency claim to halt the fraud and name a receiver to manage the fund’s assets while a full investigation can be conducted.
The SEC's complaint, filed on Sept. 13 in federal district court in Maryland, charges Merrill, Ledford, and Jezierski, along with their entities, Global Credit Recovery, LLC, Delmarva Capital, LLC, Rhino Capital Holdings, LLC, Rhino Capital Group, LLC, DeVille Asset Management LTD, and Riverwalk Financial Corporation, with violations of the antifraud provisions of the federal securities laws.
Common Signs of a Ponzi Scheme
Once you're inside a Ponzi Scheme, it can look and feel a lot like a normal investment opportunity, especially if the scheme operator is adept at creating false investment documentation. The key is not to get draw into a Ponzi Scheme in the first place. The most common signs of these frauds are evident from the beginning - that's when you have the greatest chance of identifying them.
Inflated investment returns
Guaranteed investment returns
Tax-free investment returns
Vagueness about the actual investments
Overly simplified investment documentation - or none at all
Lack of true expertise or history in sophisticated investing