SEC Moves To Smash Alleged Advertising Ponzi Scheme In California; Agency Charges Dean P. Gross, Gregory W. Laser
Investors were duped into believing that a company known as Bridon Entertainment bought advertising space in bulk and resold it at a substantial profit to famous companies such as Home Depot, Federal Express, DIRECTV, Warner Brothers and Slim-Fast, the SEC said.
No such advertising deals existed and the investors were duped by “fake” contracts that included the famous names, the SEC said.
Named defendants were Dean P. Gross, 47, of Agoura Hills, and Gregory W. Laser, 46, of San Diego. Their assets have been frozen. Gross did business as Bridon Entertainment and diverted $6 million to his own use, the SEC said.
The scheme began in December 2006, according to the SEC.
“Gross provided investors a fabricated contract that appeared to be between Bridon and a representative of the well-known corporation,” the SEC said. “Gross and Laser told investors that Gross would use their money to purchase advertising time and space, and that their promised returns would be generated by the profitable resale of that advertising to the specifically identified company.
But “Gross did not have relationships with the well-known companies he claimed were his clients,” the SEC said. “Gross did not buy or resell advertising, and investorsâ€™ purported returns were not generated by the sale of advertising, but instead came from money raised from subsequent investors, in classic Ponzi fashion.”
At least 45 investors were fleeced in the scheme, which featured both short-term and longer-term investments, the SEC said. Interest rates pitched in a 30-to-90-day program ranged from 8 percent to 30 percent.
A year-long program offered rates typically between 10 percent and 20 percent.
“In some instances, Gross offered a 40 percent return,” the SEC said.
Read the SEC complaint against Gross and Laser.