URGENT >> BULLETIN >> MOVING: SEC: Ponzi Money Collateralized Credit Line Used To Fund ‘Bridal Store, A Bounty Hunter Reality Television Show, And A Soul Food Restaurant’

“Marcum’s scheme began to unravel in mid-2013, when certain of his investors began demanding distributions. Marcum could not comply, because virtually all of his investors’ money is gone. However, Marcum has attempted to reassure his investors that their investment is secure by producing fabricated documents showing that he has purported net worth of nearly $300 million. In fact, Marcum is nearly broke, and his accounts contain less than $2,000.” SEC complaint against John K. Marcum, Aug. 26, 2013

americaatrisk4URGENT >> BULLETIN >> MOVING: The SEC has gone to federal court in Indianapolis to obtain an emergency asset freeze against John K. Marcum and Guaranty Reserves Trust LLC. Marcum was accused by the agency of conducting a purported day-trading Ponzi scheme that gathered $6 million, collateralizing a $3 million line of credit with Ponzi proceeds — and using the line to a fund “a bridal store, a bounty hunter reality television show, and a soul food restaurant owned and operated by the bounty hunters.”

Investors did not know their money was being used in this fashion, the SEC alleged.

Moreover, the SEC charged, Marcum swindled investors by targeting their retirement savings,  providing account statements showing false gains and promising a guaranteed return of the principal. Some of the money went to “pay personal expenses accrued on credit card bills, including airline tickets, luxury car payments, hotel stays, sports and event tickets, and tabs at a Hollywood nightclub.”

And when the scheme was imploding, Marcum told existing investors that he intended to recruit new investors, setting the stage for a new round of swindling, the SEC charged.

“Marcum tricked investors into putting their retirement nest eggs in his hands by portraying himself as a talented trader who could earn high returns while eliminating the risk of loss,” said Timothy L. Warren, acting director of the SEC’s Chicago Regional Office. “Marcum tried to carry on his charade of success even after he squandered nearly all of the funds from investors.”

Marcum, 49, resides in Noblesville, Ind., the SEC said.

In a particularly disturbing series of allegations, the SEC alleged that Marcum bartered his life during a conference call with investors in a bid to keep the scam afloat.

Read the SEC statement.

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