BULLETIN: SEC Employee Was Member Of Collapsed Imperia Invest IBC Fraud Scheme That Targeted Deaf Investors And Drained Millions Of Dollars; ‘Headquarters’ Worker Placed On Administrative Leave

BULLETIN: An employee of the SEC at its Washington headquarters was a member of a fraud scheme under investigation by the agency and shared misleading information about its ongoing probe with other investors, according to a report to Congress by SEC Inspector General H. David Kotz.

The document does not reveal the employee’s name or his job title. Nor does it  identify the scheme by name.

But a date cited in the document matches the date of a dramatic action the SEC’s regional office in Utah filed in October 2010 against Imperia Invest IBC, an extremely murky firm that used “fake” offshore addresses, targeted thousands of deaf investors and stole millions of dollars without returning “a single penny,” according to records. A second date cited in the Kotz document matches the date the SEC obtained a judgment against Imperia.

The Imperia case has been discussed in Washington’s highest power corridors. It was specifically referenced by President Obama’s Financial Fraud Enforcement Task Force in December 2010 as a firm targeted in Operation Broken Trust, a government action aimed at a broad array of investment-fraud schemes that had drained the U.S. economy of billions of dollars.

Kotz opened a probe into the matter after receiving information from “a regional office senior official that an employee at SEC headquarters was providing false, misleading, and nonpublic information to investors about an active enforcement investigation and litigation from as early as October 2010 to February 2011,” according to Kotz’s semiannual report to Congress made public yesterday.

“The regional office senior official was concerned that the employee’s actions not only threatened to jeopardize the ongoing investigation, but also misled several investors into believing that the purported company was legitimate,” according to the Kotz report. “Moreover, some or all of the investors knew that the employee worked at the SEC and, therefore, believed incorrectly that he had first-hand knowledge of the SEC’s investigation and that his representations were credible. After the regional office senior official e-mailed the employee and inquired as to whether he was communicating with investors about the investigation, the employee was placed on administrative leave.”

Kotz’s office reviewed “nearly 10,000 e-mails” as part of the probe and “took the employee’s sworn testimony,” according to the report. Internet postings also were reviewed, along with transcripts, court records and “other relevant information.”

“The [Office of Inspector General] found that the employee, by his own admission, communicated with several investors during the SEC’s investigation of, and litigation against, the purported company,” according to the report. “In so doing, the employee shared nonpublic, false, and misleading information with investors.

“As a result, the OIG found that his conduct not only confused certain investors and gave them a false sense of hope, but it also had the potential to adversely affect an ongoing enforcement investigation,” according to the report.

Imperia Invest was accused by the SEC of siphoning the money into offshore accounts.

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3 Responses to “BULLETIN: SEC Employee Was Member Of Collapsed Imperia Invest IBC Fraud Scheme That Targeted Deaf Investors And Drained Millions Of Dollars; ‘Headquarters’ Worker Placed On Administrative Leave”

  1. This stating to remind me espionage wars with sides trying to infiltrate each other operations.

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  2. boris: This stating to remind me espionage wars with sides trying to infiltrate each other operations.

    You are not the only one thinking along those lines. I found this article from one of our better broadsheet newspapers in UK very confusing.

    http://www.guardian.co.uk/world/2011/may/31/washington-moves-to-classify-cyber-attacks

    boris: This stating to remind me espionage wars with sides trying to infiltrate each other operations.

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  3. I want to know how I can get my money back from imperial invest I know they used deaf people but I gave my money to them and they got part of it so someone needs to pay me back so if someone could help I’d appreciate it

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