UNBELIEVABLE: Now, A Scam Known As ‘Her Majesty’s Credit Union’ That Duped Investors By Falsely Claiming To Be Insured By Lloyd’s Of London And Backed By The Government, SEC Says

The SEC’s complaint against “Her Majesty’s Credit Union” lists the URL for the purported CD business. This screen shot by the PP Blog was taken at the URL.

A scammer known by three names who’d earlier presided over an “insolvent” credit union in Georgia before being forced out of business in eight months went on to start a bogus credit union in the U.S. Virgin Islands, the SEC said.

The Virgins Islands enterprise was known as “Her Majesty’s Credit Union” (HMCU) and sold bogus CDs, duping investors by trading on the names of Lloyd’s of London and government entities to sanitize the fraud, the SEC said.

Charged in the alleged $532,000 caper was Stanley B. McDuffie of Denver. McDuffie formerly was known as Stanley Roberson and Stanley Battle, the SEC said.

“McDuffie and HMCU held out HMCU as a secure, legitimate, regulated credit union, promised to pay above-market interest rates, and assured investors that their deposits were insured by Lloyd’s of London or the U.S. Virgin Islands’ government,” the SEC said. “In reality, HMCU was an unregulated, illegitimate credit union that never held share insurance covering investor deposits, and McDuffie and HMCU misappropriated investors’ funds.”

The Better Business Bureau record for HMCU notes a 2010 action by the Colorado Division of Securities against “Stanley B. Roberson.”

Roberson “was sentenced to one year in jail after being found in contempt of a court order,” the BBB reported, citing Colorado authorities. “Mr. Roberson is the chief executive officer of Her Majesty’s Credit Union, a U.S. Virgin Island company with a servicing office in Denver.”

In 2010, Fred Joseph, the commissioner of Colorado’s Division of Securities, put it this way (italics added):

Mr. Roberson failed to produce documents pursuant to a lawful subpoena issued to him as part of our investigation of Her Majesty’s Credit Union. The Division of Securities then filed contempt proceedings in Denver District Court to compel production. Since its accounts are not federally insured, we are attempting to determine if Her Majesty’s Credit Union is offering only uninsured deposits or is engaging in the offer and sale of unregistered securities.

The SEC today charged McDuffie with selling unregistered securities, saying in its complaint that McDuffie “misappropriated the funds for personal and business expenses, causing investors to lose most of their principal, and rendering it impossible for HMCU to make required interest payments.”

McDuffie also allegedly clammed up to the SEC, the agency said. From the SEC complaint (italics added):

After a subpoena enforcement action resulted in McDuffie being ordered by the Court to comply with the SEC’s subpoenas, McDuffie refused to testify in the SEC’s investigation, citing his Fifth Amendment privilege against self-incrimination in response to all substantive questions.

Named a defendant in the SEC’s action against McDuffie was Jilapuhn Inc., the apparent operator through McDuffie of “Her Majesty’s Credit Union.”

The defunct Georgia credit union was known as the “Jilapuhn Employees Federal Credit Union,” the SEC said.

“In August 2005, after JEFCU had operated for only eight months, the [National Credit Union Administration] determined that JEFCU was insolvent, and therefore it issued a Notice of Involuntary Liquidation and Revocation of Charter,” the SEC said.