BULLETIN: Salt Lake City Man Arraigned In Atlanta On Charges Of Running Ponzi And Fraud Scheme In Which Tens Of Millions Of Dollars Mysteriously Vanished Offshore; Canadian Also Charged In Alleged Caper

BULLETIN: Two men — one from Salt Lake City, the other from Belleville, Ontario — have been charged by federal prosecutors in Atlanta with operating a Ponzi and fraud scheme in which tens of millions of dollars mysteriously disappeared overseas.

Thomas Repke, 57, was arraigned today in Atlanta. Prosecutors said he worked with the Canadian man, James Jeffery, 58, to fleece more than $30 million from investors.

“This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts,” said U.S. Attorney Sally Quillian Yates.

The scheme began in 2006 and centered around a company known as Coadum Capital in which investors were told that they were purchasing shares in hedge funds and that their investment capital was kept in “escrow” accounts and thus not at risk. Participants expected to earn up to 5 percent a month.

“[A]lthough investors were instructed to and did transmit much of their funds to one or more supposed ‘escrow’ accounts, including one in Atlanta, the money did not stay in any such account,” prosecutors said. “Rather, unbeknownst to investors, Repke and Jeffery transferred over $20 million overseas to accounts in Switzerland and the Mediterranean island of Malta.

“This money was supposedly invested in a series of hedge funds or other investments operated by a supposed Malta-based trader,” prosecutors said.

But the investments “produced no earnings at all,” prosecutors said. “[B]y the end of 2007 only a fraction of the transferred funds remained deposited in these European accounts.”

Regardless, Repke and Jeffery “continued to send account statements every month to investors continuing to represent that their funds remained intact, preserved in escrow accounts, and that monthly earnings of 3-5% continued to accrue,” prosecutors said.

Both Repke and Jeffery had “no control” over the overseas accounts — accounts “about which they received little or no information,” prosecutors said.

Investigators obtained correspondence that showed Repke and Jeffery both “were frustrated in their repeated requests to obtain information about where the funds were being held, how they were being used by the trader, and whether and to what extent earnings were being generated,” prosecutors said.

The SEC referred the case for criminal investigation after bringing an administrative action and lawsuit against Repke and Jeffery in 2008, according to records.

“Those who prey on the investing public in this way will continue to find themselves facing federal felony charges,” Yates said.

The investigation was coordinated by the Financial Fraud Enforcement Task Force. prosecutors said Jeffery had not yet made his initial court appearance in the case.

Repke potentially faces decades in prison, if convicted. He was charged with multiple counts of mail fraud, wire fraud and conspiracy.

(NOTE: The SEC complaint references a Malta company known as “Exodus Equities Inc,”  which apparently was tied to an entity known as “Exodus Platinum Genesis Fund Ltd.” Also of note for additional case information/filings is the website of Pat Huddleston, the court-appointed receiver in the SEC case.)

About the Author

Comments are closed.