Tags: sec | ponzi | scheme | defraud | investors

SEC: $102 Million Ponzi Scheme Hit 600 Investors

SEC: $102 Million Ponzi Scheme Hit 600 Investors
Elnur | Dreamstime.com

By    |   Wednesday, 20 June 2018 07:25 AM

The Securities and Exchange Commission has filed charges and obtained an asset freeze against the individuals and companies behind a $102 million Ponzi scheme that bilked investors throughout the U.S.

According to the SEC’s complaint, the defendants defrauded more than 600 investors through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp.  

The complaint alleges that investors were told that their funds would be used for the companies and some were guaranteed dividends or double-digit returns.  

But, according to the complaint, the defendants spent at least $20 million to enrich themselves, paid $38.5 million in Ponzi-like payments, and transferred much of the remainder in transactions that appear unrelated to the issuers’ purported businesses.

The complaint charges Perry Santillo, of Rochester, New York, Christopher Parris, also of Rochester, Paul LaRocco, of Ocala, Florida, John Piccarreto, of San Antonio, and Thomas Brenner, of Orville, Ohio, along with the three companies.

“We allege that the defendants engaged in a massive fraud and swindled investors to line their pockets with ill-gotten gains,” said Marc P. Berger, Director of the SEC’s New York Office. “Investors should be on high alert whenever they are promised guaranteed returns.”

Meanwhile, mundane back-office concerns are giving pause to potential investors in digital currency hedge funds who have otherwise warmed up to the volatile asset class, Reuters reported.

Traditional custodian banks such as Bank of New York Mellon (BK) and State Street Corp. (STT) do not yet handle crypto assets like bitcoin. That means hedge funds have been forced far from Wall Street to places like Springfield, Pennsylvania, or Murray, Kentucky, to find auditors, custodians and record-keepers, according to fund disclosures and executives.

Dealing with this collection of small and relatively unknown firms has sparked concern among potential investors and their advisers, who worry about a lack of scale, history and brand name. That, in turn, is keeping a lid on some new investment in digital currencies.

The usual safeguards “are either non-existent or shaky as of yet,” said Nick Mitsiou of $55 billion asset manager LGT Capital Partners.

Chris Solarz, who helps institutional investors pick hedge funds for consultant Cliffwater LLC, called infrastructure for crypto hedge funds “pretty green.”

Both LGT and Cliffwater have so far steered institutional clients clear of cryptocurrency funds, partly because of concerns about underdeveloped infrastructure.

(Newsmax wire services contributed to this report).

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
InvestingAnalysis
According to the SEC’s complaint, the defendants defrauded more than 600 investors through sales of securities in issuers they controlled, including First Nationle Solution LLC, United RL Capital Services, and Percipience Global Corp.  
sec, ponzi, scheme, defraud, investors
399
2018-25-20
Wednesday, 20 June 2018 07:25 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved