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Tag: Pennsylvania Securities Commission

  • BULLETIN: Quebec Regulators Reference Cherryshares And Mega Pension Plan — Two ‘Programs’ Pushed On Ponzi Boards — In Freeze And Cease-Trade Orders Against 3 Canadian Promoters, 2 Companies

    BULLETIN: The Autorité des marchés financiers (AMF) has obtained freeze and cease-trade orders against three Quebec residents and two business entities — and has shut down at least one website amid allegations that an international marketing scam was under way.

    At least two of the programs referenced in AMF’s action were promoted on the TalkGold and MoneyMakerGroup Ponzi forums: Cherryshares, an HYIP darling that collapsed last year, and Mega Pension Plan.

    Cherryshares was a paid advertiser on the Ponzi forums. It vanished under mysterious circumstances in December.

    AMF described the scams as insidious because the promoters didn’t ask for big money from individual investors, instead relying on relatively small sums to add up to a larger sum.

    “These seemingly modest amounts add up to anything but,” according to an AMF news release.

    Named in the AMF action are Warren English of Laval, and Alain-André Desarzens and Michèle Amiot of Rimouski. Desarzens and Amiot are married, AMF said.

    “Messrs. English and Desarzens had issued a mass e-mailing to thousands of potential investors with promises of pocketing a lot of money fast,” AMF said.

    Using different email addresses, English and Desarzens promoted “numerous investments,” including Cherryshares and Mega Pension Plan, AMF alleged.

    “They offered thousands of investors around the world, including two Quebeckers, the opportunity to generate possible returns ranging from U.S.$1,000 to $90,000 on a minimum investment of between U.S.$10 and $300,” AMF alleged.

    Even as he was soliciting  new prospects, English was under a cease-trade order issued by the Ontario Securities Commission in 2003, AMF said.

    Desarzens, meanwhile, was under a cease-trade order issued by the Pennsylvania Securities Commission in 1999, AMF said.

    English used some of the funds from the Mega Pension Plan scam to acquire a “luxury condominium” in Laval, AMF said.

    “Based on the data gathered by the AMF, Mr. English moved nearly $525,000 between his accounts and those of his company, Méga International Business,” AMF said.

    All in all, Desarzens allegedly acquired $875,000 as a result of scamming.

    No breakdown of which scam was more profitable was provided, but some of the cash ended up with Desarzens’ spouse — and some of it ended up with a Desarzens-controlled entity known as Institut des médecines universelles, AMF said.

    A website linked to Desarzens — www.myleads.8k.com — was ordered shut down.

  • Beyond Diamonds Investments Inc., Darial Chatman Subjects Of ‘Cease And Desist’ Order In South Carolina; State Says Firm Was Selling Unregistered Securities And Claiming To Be ‘SEC Compliant’

    UPDATED 12:52 P.M. EDT (USA) A South Carolina man previously ordered by Pennsylvania to stop selling unregistered securities for a real-estate business now has been ordered by South Carolina to stop selling unregistered securities for yet-another business, authorities said.

    Darial Chatman, also known as Darrell Chatman and Darrell Chapman, was ordered by the Pennsylvania Securities Commission in May 2009 to halt the selling of securities for his business, Dream Builders of South Carolina LLC. He also was issued a cease-and-desist order in South Carolina for the same company, according to records.

    Now the office of South Carolina Attorney General Henry McMaster has ordered Chatman to stop selling unregistered securities for a company known as Beyond Diamonds Investments Inc. (BDI), amid allegations it “advertised investment opportunities earning 30% annually” and made statements that were “materially misleading or false.”

    South Carolina authorities said they believed BDI was not registered to do business in any state, but had placed postcards in “newspaper boxes at some residences in the area of Columbia” and mailed postcards to other prospects.

    Among the assertions on the postcard was that BDI was “SEC Compliant.” The company claimed it “Will Financially Out Perform (sic) Your Current Brokerage or Investment Firm,” authorities said, noting that BDI’s postcard advertised an “Account Minimum” of $5,000 and claimed to charge no fees.

    BDI operates a website filled with grammar, spelling and usage errors to recruit investors, South Carolina investigators said. They added that the company claims not to divulge its method of making money.

    “We all know there are hundreds of other ways to make money outside of stocks, mutual funds, cd’s ect ect (sic),” the state quoted the firm as saying. “We have the experience to make you money using all those other ways. Sorry, we do not discuss our methods.”

    Among the other assertions:

    • “Our principle (sic) has over 15 years experience in aggressive investing in high risk projects.”
    • “[O]ur principle (sic) has fifteen years experience in this field and has earned millions of dollars for people just like you[.]”
    • “We can guarantee that you will not lose money working with us.”
    • “[W]e are … still in the process of getting proper compliance with the state. However, we can still get your account set-up and start working for you.”
    • “We are also involved with the Securities Industry Association in the continuing enhancement and standardization of industry practices.”

    But McMaster’s office said it did not believe BDI was a member of the Securities Industry Association, a trade group based in Alexandria, Va.

    On July 12, according to investigators, a person identifying himself as Chatman replied to a message left at the phone number provided on BDI’s postcard.

    “Chatman stated that the investments in question involved organizing and capitalizing concerts by ‘big’ acts in South Carolina, and he specifically cited a concert he claimed to have organized in Florence, South Carolina, with John Michael Montgomery as the headline act,” South Carolina authorities said. “Chatman stated he made only $6,000 on that concert at one dollar per ticket.”

    Investigators said they believed the concert Chatman referenced sold fewer than 700 tickets and that “Chatman continues to owe approximately $6,000 in expenses to the Florence Civic Center.”

    Moreover, authorities said, the concert was promoted as a fundraiser for a charity known as Donate A Blessing Foundation Inc. The charity uses the same address as BDI, and Chatman is listed as its chief executive officer.

    BDI also promotes a purported “scholarship” program on its website, which uses a tag line of, “If it makes since (sic) to us, it makes money for you.”

    Read the South Carolina cease-and-desist order against BDI and Chatman. The order was brought by the Securities Division of McMaster’s office.