BULLETIN: SEC Charges Jason Bo-Alan Beckman In Trevor Cook Ponzi Scheme; Judge Freezes Assets; Agency Says Investors’ Cash Used To Make Child-Support Payments And Puchase ‘Luxury Homes’ And Cars

BULLETIN: Jason Bo-Alan “Bo” Beckman has been charged civilly by the SEC in the Trevor Cook Ponzi scheme in Minnesota and named a “leading” figure, according to court filings. The case against Beckman was brought as an action separate from the civil action against Cook, who also was charged criminally and is in federal prison serving 25 years after pleading guilty last year.

The SEC’s complaint suggests other defendants may follow.

“His fraud was part of a bigger scheme orchestrated by and with Trevor Cook and several associates,” the agency said, alleging that Beckman raised about $47.3 million of the $194 million gathered in the overall fraud — roughly 25 percent of the overall total. Former radio host Pat Kiley previously was charged civilly.

Chief U.S. District Judge Michael J. Davis has frozen Beckman’s assets.

One individual — a 41-year old nurse — submitted a sworn affidavit to Davis that Beckman promised him “guaranteed” annual returns of “12% or greater.”

The nurse, an inexperienced investor who put $130,000 into the scheme, asserted he learned about the purported currency-trading program from Hollie Beckman, Beckman’s wife. Hollie Beckman has been named a relief defendant amid assertions she received ill-gotten gains. Her assets also have been frozen.

Another inexperienced investor — a 60-year-old man who previously was retired but has returned to work because his life savings of nearly $750,000 were wiped out in the scheme — said in a sworn affidavit that Beckman promised him a “guaranteed”  return of 10.5 percent. Like the nurse, the man was given a tour of the Van Dusen Mansion, the landmark Minneapolis estate from which Beckman and Cook conducted business.

This man rolled over his 401K account and liquidated his pension fund to become an investor, according to an affidavit.

Yet-another inexperienced investor — a 62-year-old man who works as a water-plant operator — said he put $99,300 into the scheme by liquidating an account at Bear Stearns. Beckman promised him that his “fixed” account would generate about 13 percent annually, according to a sworn affidavit.

All told, the SEC charged, “Beckman’s investors ultimately lost over $39 million by investing in the Currency Program and putting their money in his hands.” About 143 investors gave Beckman their money.

Luz M. Aguilar, an SEC investigator, said that $85 million of the $194 million “was never invested in any type of foreign currency trading.”

And Aguilar alleged that “the Beckmans deposited approximately $7.7 million into their personal joint accounts.” The funds originated “from accounts containing funds of investors,” according to Aguilar.

More than $61,000 was used to make child-support payments, Aguilar alleged.

But most of the money went to fuel an extravagant life-stlye, according to Aguilar. Here is a list of some of the spending:

  • $210,828 for automobile payments. The fleet allegedly included a 2010 Jaguar, a 2008 Land Rover, a 2006 Land Rover, a 2008 Mercedes, a 2008 Suzuki and a 2000 Mercedes.
  • $1.49 million for payments “toward the purchase” of luxury homes in Minneapolis, Texas and Florida.
  • $695,000 for credit-card payments.
  • $180,000 for a suite to watch hockey games.
  • $36,000 to “resorts.”
  • $76,000 to a country club.
  • $108,000 for cash withdrawals.
  • $224,000 for construction and repairs.
  • $997,000 for payments to seven law firms.
  • $223,000 for taxes.

“Beckman was in a position to know the truth about the Currency Program,” the SEC charged. “He worked side-by-side with Trevor Cook at the Van Dusen mansion. Red flags waved all around him. For example, he knew — by April 2008, over a year before the scheme collapsed — that investors’ funds were pooled and were not in segregated accounts at all. He also learned from Trevor Cook that the location of investors’ funds was ‘not a black and white situation.’ The warning signs were glaring. Yet Beckman kept [quiet] — and kept taking tens of millions of dollars from investors . . .

“Now that the Currency Program is over — and the money flow has stopped — the Beckmans apparently are struggling to make ends meet. Their expansive home in the Minneapolis suburbs is in foreclosure,” the SEC said.

The SEC asked Davis to halt a sheriff’s sale set for March 14, and the judge issued an order blocking it.

Even though Beckman had serious doubts about Cook, he kept them to himself, not sharing with investors information they needed to make informed decisions, the SEC charged.

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2 Responses to “BULLETIN: SEC Charges Jason Bo-Alan Beckman In Trevor Cook Ponzi Scheme; Judge Freezes Assets; Agency Says Investors’ Cash Used To Make Child-Support Payments And Puchase ‘Luxury Homes’ And Cars”

  1. From 2009:
    Record casts doubt on money manager; A trail of lawsuits – two by his mother – and inquiries dogged Bo Beckman
    http://www.allbusiness.com/legal/trial-procedure-suits-claims/12568331-1.html

    But Morningstar says it has never ranked Beckman, and court filings and regulatory documents raise questions about other Beckman claims.

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  2. ” – $997,000 for payments to seven law firms.”

    That’s a lot of money for an “astute investor” to spend!

    Interesting link, Tony.

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