‘.44 Magnum’ Investment Scheme Was Year-Long Fraud That Fetched $5.77 Million, SEC Says; Defendant Blames It On ‘One-Eyed Man’; ‘Call Girls’ Purportedly Received 848K; 3 Charged In Alleged Swindle That May Set New Standard For The Bizarre

EDITOR’S NOTE: Would such a tale as summarized in the headline above and story below even sell as fiction in the bookstores and movie houses?

Whether your answer is yes or no, the practical reality is that it apparently has become possible in America to gather millions of dollars from at least 70 domestic and international investors (greedy suckers?) in a year by:

1.) Cherry-picking the name of a real-life German bank.

2.) Finding at least two post-Madoff Americans willing to sell anything and paying them more than $650,000 to turn a blind eye to everything as they positioned the “program” as one in which absurd returns were “100 percent guaranteed.”

3.) Taking the name of the German bank and tying it to popular fiction and a “program” named after a famous American handgun, the .44 magnum.

4.) Firing up a website that used the German bank’s name and waiting for the money to stream in — before ultimately doling out $848,500 to three Las Vegas “call girls” and another $1 million to an apparent Ponzi insider.

But what to do if you get caught? New court filings by the SEC show that you can at least try to claim you’re a victim of a real-life extortionist whose key physical characteristic is that he has only one eye — rather like a celluloid character from the world of popular fiction who had only one arm.

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As things stand, elements of the SEC’s case against Geoffrey H. Lunn and his alleged fraud colleagues Darlene A. Bishop and Vincent G. Curry read as though the defendants came straight out of Central Casting.

The scheme itself evokes images of popular fiction, including the “Dirty Harry” movie series and “The Fugitive” television series and movie reboot. What’s more, because the scheme is alleged to have used a name that could conjure images of a German bank famous in real life, it inevitably evokes images of some downright ugly nonfiction. (The bank once was associated with infamy, given that it came under the influence of Nazis in Hitler’s Germany.)

Despite the bizarre backstory and the penetrating brightness of the red flags, Lunn’s “.44 Magnum” investors apparently displayed no qualities of discernment and allegedly bought into a scheme based upon representations that $44,000 would turn “into $2 million within 10 to 12 banking days.”

Lunn, of Sheridan, Colo., has admitted the $5.77 million “.44 Magnum Leveraged Financing Program” he is charged with orchestrating between February 2010 and February 2011 “was a con, basically,” the SEC says.

The scheme, the SEC said, married the .44 Magnum theme to the name of Dresdner Financial, a “fictitious business” with a name similar to the name of Dresdner Bank, formerly one of Germany’s largest financial institutions. It is not unusual for a scammer to trade on the name of a well-known company to pull off a con.

But Lunn, 56, claimed he could not abandon the purported Dresdner/.44 Magnum program because he was acting under the influence of an extortionist who “threatened to kill him and his family,” the SEC said.

Lunn, according to the SEC, described the purported extortionist as a “one-eyed man” who used “the alias Robert Perello.” He further claimed “he did not know Perello’s true identify or current whereabouts” and that he “was acting at Perello’s direction when he participated in the fraud.”

The alleged narrative of Lunn resembles the storyline of “The Fugitive,” a 1960s television series starring David Janssen that inspired a 1993 movie starring Harrison Ford. Both Janssen and Ford played the fictitious character Dr. Richard Kimble, accused of murdering his wife.

Kimble insisted the real killer was a “one-armed man.”

Lunn’s story also evokes images of the “Dirty Harry” movie franchise starring Clint Eastwood as fictional detective “Inspector Harry Callahan,” who armed himself with a .44 magnum handgun while battling San Francisco’s worst criminals and giving by-the-book cops, prosecutors and judges fits.

How much of Lunn’s tale was borrowed from Hollywood and the history books remains unclear. What is clear is that yet another bizarre securities caper allegedly was hatched in the United States.

“Lunn, Bishop, and Curry created an aura of credibility by inventing a fictitious firm with a name similar to a legitimate company,” said Robert J. Burson, associate regional director of the SEC’s Chicago Regional Office. “But their 100 percent guaranteed investment program and the astronomical returns they promised were nothing more than an elaborate hoax.”

Bishop, 40, resides in Odessa, Texas, and Curry, 42, resides in Las Vegas, the SEC said.

Bishop’s problems are not limited to her alleged role as a Lunn pitchwoman, according to records. In April, she was indicted in the Western District of Texas on charges of wire fraud and money laundering, amid allegations she sold purported “Proof of Fund” letters.

This is one of the allegations in the Texas indictment against Bishop (italics added):

Bishop convinced clients to wire tens of thousands of dollars to her in exchange for a POF letter that showed that they had tens of millions (sometimes hundreds of millions) of dollars in a bank account.

The Bishop clients “could then use this appearance of wealth to negotiate other
business deals or obtain money from other investors,” according to the indictment.

From the SEC’s complaint filed yesterday in Colorado (italics added):

Lunn did not use any of the investors’ money as promised. Instead, Lunn used the money for non-investment purposes, including withdrawing more than $1 million in cash and Western Union transfers, giving $848,500 to three Las Vegas call girls, paying $1.3 million to individuals who helped market the scheme (including over $650,000 to Bishop and Curry), giving $1 million in a Ponzi-like payment to a favored investor, and using the remaining funds to pay for Lunn’s personal and business expenses.

To date, “the Commission has not been able to identify or locate Perello,” the SEC said. “Regardless of whether Perello exists or had any role in the fraudulent scheme, Lunn is liable for his own conduct.”

And so, too, are the hucksters who advanced the Dresdner/.44 Magnum scheme, according to the SEC.

Read the SEC complaint against Lunn, Bishop and Curry.