BULLETIN: SEC Says California Man Was Running THREE Ponzi Schemes — One Of Them Allegedly Duped Investors Into Believing They Were Funding FedEx Distribution Facility In Las Vegas

BULLETIN: The SEC has gone to federal court in the Southern District of California, alleging that Steven L. Hamilton of Carlsbad was running three Ponzi schemes through three companies he set up “to solicit unsuspecting investors.”

Hamilton is 42, the SEC said.

One of the offers allegedly duped people into believing they were investing in a Las Vegas distribution center for FedEx, the famous courier company.

“Hamilton, however, did not have an agreement with Federal Express to build a Federal Express facility in Las Vegas, Nevada, and did not have a signed lease with Federal Express,” the SEC charged. “Instead, Hamilton converted the investor funds to his own use.”

Hamilton and his companies also duped investors into believing they were investing in real estate loans secured by deeds of trust or certificates of deposit.

Charged with Hamilton were Verde Retirement LLC of San Diego, Verde FX Nevada LLC of San Diego and Covenant Capital Partners of Encinitas, Calif.

“Hamilton used the money he raised from these three fraudulent offerings to pay his personal living expenses,” the SEC charged. “In order to perpetuate his scheme, and to make his purported investments appear successful, Hamilton also used a portion of the monies he raised to pay fictitious returns to investors when, in fact, his investments were non-existent and he was simply using investors’ monies to pay other investors.”

The combined fraud schemes operated between 2007 and February 2011, raising at least $1.6 million from at least 23 investors, the SEC said.

And Hamilton also touted certificates of deposit — while trading on the name of the government and engaging in website chicanery to sanitize the scheme, the SEC said.

“Fliers for the Verde CDs, posted by Hamilton on the Verde website, advertised ‘fixed income accounts’ that ‘earn 5x more than a comparable term current bank CD,'” the SEC charged.

Site visitors were told that capital was “protected by our highly conservative senior loans against high quality, income producing commercial real estate,” the SEC charged.

“In a September 2010 iteration of the website, Verde represented that its fixed income accounts were ‘supported by the monthly interest payments’ Verde received from its portfolio of ‘well chosen, US Government Agency guaranteed (Fannie Mae Freddie Mac), conservative, senior loans,'” the SEC charged.

At the same time, the website further assured  prospects “that the Verde mortgage portfolio was ‘backed 100% by the US Government Agencies, thus ensuring [investor] principal and income [were] safe,'” the SEC charged. “By November 2010, the website had been revised to eliminate references to a portfolio that included ‘FDIC insured CDs.'”

Regulators and U.S. law enforcement long have warned that fraud schemes destroy confidence in legitimate capital markets and that the Internet has been used by hucksters to disguise criminality and create the appearance of legitimacy.

Read the SEC complaint.