Sean David Morton, a psychic and self-described "America's Prophet," apparently did not see investigators coming when he touted investments.
The U.S. Securities and Exchange Commission sued Morton, 51, on Thursday on civil fraud charges, accusing him of fraudulently raising more than $6 million from more than 100 investors for Delphi Investment Group in 2006 and 2007.
"In soliciting these individuals, Morton claimed that he would use his psychic expertise to provide investment guidance to his investment team, and falsely touted his historical success in psychically predicting the various rises and falls of the market," the complaint filed in Manhattan federal court said.
The U.S. market regulator's lawsuit said Morton and his wife Melissa Morton, 42, diverted investor money, including at least $240,000 to their own non-profit religious organization, Prophecy Research Institute (PRI).
It said Morton enticed investors through a monthly Delphi Associates Newsletter, a web site and public appearances in New York City and elsewhere. He also broadcasts on a nationally syndicated radio show with an average audience of nearly 3 million listeners, the SEC said.
It quoted from a July 20, 2006 newsletter, which said: "I have called ALL the highs and lows of the market, giving EXACT DATES for rises and crashes over the last 14 years."
Morton is representing himself and could not immediately be reached for comment by phone or email at his Hermosa Beach, Calif., organization Heaven & Earth LLC.
Morton hosted "financial survival" workshops at the Mount Shasta Resort in California in September 2007, where he told prospectives investors he could make them "piles of money," according to the complaint.
Morton placed investor's money in shell companies Vajra, 27 Investments and Magic Eight Ball, controlled by him and his wife. She was also named as a defendant in the complaint.
"While Morton promised investors that all of their funds would be used to trade foreign currencies, in fact, he invested only about half with foreign currency trading firms," the SEC said.
The Mortons are defendants in two pending private civil actions, the SEC said. The market regulator is asking the court to order disgorgement of any ill-gotten gains and fines under securities laws.
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