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Tag: William P. Hicks

  • SEC: Penny-Stock Scammers Used ‘Intricate Web Of Offshore Corporations, Foreign Accounts, And Financial Institutions . . . In Canada, Nevis, Panama, Switzerland, And The Turks And Caicos Islands’

    breakingnews72Two Canadians have been charged by the SEC in an alleged pump-and-dump scheme that included a reverse merger between a “shell public company” and a startup, “blast emails” and a concerted hype campaign, the U.S. agency said.

    Named defendants are Bruce D. Strebinger, 38, of Vancouver, and Brent Howard Chapman, 38, who “is or has been residing in Antigua,” the SEC said. The complaint is filed in U.S. District Court for the Northern District of Georgia.

    “Strebinger and Chapman rigged a penny stock in their favor while staging a massive promotional campaign,” said William P. Hicks, associate director for enforcement in the SEC’s Atlanta Regional Office. “They disguised their scheme by dumping their shares in relatively small amounts over extended periods of time, and they attempted to hide their proceeds from U.S. regulators by routing them through offshore accounts.”

    The shell was known as Americas Energy Company-AECo. Its stock was suspended, with the company being liquidated in bankruptcy, the SEC said. The other company was a startup coal mining and oil and gas exploration business based in Nashville, Tennessee” that became known as Americas Energy Company Inc.

    From the complaint (italics added):

    The promotion began in September 2009 and continued through April 2010. While the promotion continued and the Stock price soared, Strebinger and Chapman sold their Stock for $17 million through offshore accounts, including accounts with Swiss financial institutions in the names of three entities: (1) Muskateer Investments, Inc. (“Muskateer”), beneficially owned by Strebinger; (2) Furla Blue SpA (“Furla”), beneficially owned by Strebinger’s wife, Anne Strebinger (“Strebinger’s Wife” ); and (3) Lance Investments S.A. (“Lance), beneficially owned by Chapman.”

    The promotion increased investor demand for the Stock and enabled Strebinger and Chapman to reap huge profits through sales of the Stock while simultaneously concealing from investors not only that Strebinger and Chapman owned a significant portion of Americas Stock, but also that it was Strebinger and Chapman who were together marketing and funding a multi-million dollar promotional campaign related to the Stock.”

    All in all, the SEC charged, the duo sold their shares “through an intricate web of offshore corporations, foreign accounts, and financial institutions located in Canada, Nevis, Panama, Switzerland, and the Turks and Caicos Islands.”

    Assisting in the probe were the British Columbia Securities Commission, the Swiss Financial Market Supervisory Authority and the Financial Industry Regulatory Authority, the SEC said.

  • BULLETIN: SEC: Purported ‘Trust’ Was $15 Million Prime-Bank Ponzi Swindle Operated By Two 70-Year-Olds; 1 Of The Accused Hucksters Has Prior Conviction For Trafficking Cocaine; Investors Were Told ‘Department Of Homeland Security’ Was A Customer And That The Devil Was Behind The Adage, ‘If It Sounds Too Good To Be True . . .”

    EDITOR’S NOTE: They don’t come any weirder than prime-bank swindles — and this one is one of the strangest we’ve ever reported on. 

    UPDATED 8:19 A.M. ET (NOV. 20, U.S.A.) Two individuals — both now 70 — conducted a prime-bank Ponzi swindle known as “the Trust” since at least 2004, the SEC said late this afternoon.

    The scheme allegedly operated in more than 20 states, but was concentrated in Georgia, the SEC said.

    One of the accused allegedly claimed he first heard about the Trust in the 1990s from a man named “John” in London. The other allegedly claimed this adage — “If it sounds too good to be true, it probably is” — was the work of the devil.

    Investors were told the U.S. Department of Homeland Security was a lending customer of the purported trust, a purported “loan” program that operated secretly in England and provided a return of 38 percent a year, the SEC said.

    They also were told that the trust “was started after World War II and is comprised of several extremely wealthy European families,” that the trust “owns banks in Europe,” that the trust “has the power to create money through fractional banking and the sale of banking debentures” and “funds humanitarian projects around the world,” the SEC alleged in the complaint.

    Charged in the alleged $15 million caper were Billy W. McClintock of Bradenton, Fla., and Dianne Alexander of Carlsbad, Calif. Alexander also is known as Linda Dianne Alexander and previously lived in Cumming, Ga. McClintock has claimed to be a gospel singer, was convicted of cocaine trafficking in 1989 and served prison time in Kentucky, the SEC said.

    “McClintock and Alexander pitched an investment opportunity that simply did not exist,” said William P. Hicks, associate director of Enforcement in the SEC’s Atlanta Regional Office. “They merely reshuffled funds between investors in a modern take on a classic prime bank scheme.”

    Some of the allegations against McClintock and Alexander are reminiscent of elements of the AdSurfDaily, Legisi and Zeek Rewards cases.

    In the ASD, Legisi and Zeek cases, for instance, investors were told not to refer to the programs as “investment” programs, according to records.

    Here is one of the allegations against McClintock and Alexander (italics added):

    Apparently attempting to avoid scrutiny by federal securities enforcers, McClintock told Alexander not to refer to investor payments as an “investment,” but rather as a “loan,” and that she should never refer to those whose money she took as “investors,” but rather as “Trust lenders.”

    Alexander recruited at least 220 people into the scam, which had “downline” investors, the SEC said.

    “Alexander recklessly relied solely on McClintock’s representations about the profits to be generated by the Trust, without taking any independent steps to either verify the existence of the Trust or whether McClintock was in fact receiving payments from the Trust,” the SEC charged.

    And Alexander issued appeals to religious faith to reel in investors, calling the adage “If it sounds too good to be true, it probably is” a “lie that came from the pit of hell,” and saying, “Put your money in the Trust and your trust in God,” the SEC charged.

    Clarence Busby, a figure in the AdSurfDaily Ponzi story, was implicated by the SEC in three prime-bank swindles in the 1990s, according to records.

    Read the SEC complaint.

     

     

  • BULLETIN: Prominent Football Coach And TV Commentator Jim Donnan Charged In Alleged $80 Million Ponzi Scheme

    BULLETIN: The SEC has gone to federal court in Atlanta, alleging that Hall of Fame football coach Jim Donnan and a business partner in Ohio conducted a massive Ponzi scheme that sucked in other coaches and caused one of Donnan’s trusting former players to invest $800,000.

    The scheme began in 2007 and collapsed in 2010, the SEC charged. Donnan is a former coach of the University of Georgia and Marshall University. He once worked as a commentator for the ESPN television network.

    Charged along with Donnan, 67, was Gregory Crabtree, 50. Crabtree was an officer of a West Virginia entity known as GLC Limited, promoted as a wholesale liquidation business that bought leftover merchandise and sold it to discount retailers. Donnan was a GLC pitchman.

    GLC also was known as “Global Liquidation Center,” the SEC said.

    Investors were promised “exorbitant rates of return ranging from 50 [percent] to 380 percent” in a scheme that fetched $80 million, the SEC charged.

    But only about $12 million of the $80 million went toward merchandise purchases, with the rest used to make Ponzi payments “or stolen for other uses by Donnan and Crabtree,” the SEC charged.

    “Donnan and Crabtree convinced investors to pour millions of dollars into a purportedly unique and profitable business with huge potential and little risk,” said William P. Hicks, associate director of the SEC’s Atlanta Regional Office. “But they were merely pulling an old page out of the Ponzi scheme playbook, and the clock eventually ran out.”

    One of Donnan’s former players, the SEC charged, plowed $800,000 into the scheme after Donnan told him, “Your Daddy is going to take care of you” and “if you weren’t my son, I wouldn’t be doing this for you.”

    Donnan resides in Athens, Ga. Crabtree is a resident of Proctorville, Ohio.

    Donnan conned at least one investor by telling him, “[Y]ou can’t lose your money; it’s already pumping oil,” the SEC charged.

    And the former coach and commentator took care of himself first, the SEC charged.

    “Donnan invested approximately $5.8 million in the scheme but paid himself back approximately $13.2 million from GLC investor funds,” the SEC charged. “After the scheme collapsed, Donnan used a small percentage of his profits, less than $900,000, to pay other investors.”

    It has been a busy week for the SEC. The agency said yesterday that it had gone to federal court in Denver to halt a $15.7 million Ponzi scheme.

    Charged in that alleged caper were Michael J. Turnock, 68, of Denver and William P. Sullivan II, 45, of Highlands Ranch, Colo.

    Turnock and Sullivan were running a promissory-notes scam through a company known as Bridge Premium Finance LLC, the SEC said.

    On Monday, the SEC charged Ivan Wade Brown, 45, of Alpine, Utah, and two of his companies: Highland Residential LLC  and Avanti Capital Partners LLC.

    That case alleges a $27 million Ponzi scheme and promissory-notes scam.

  • BULLETIN: SEC Says Missing Man Was Mastermind Of $40 Million Fraud In Georgia In Which ‘Substantially All’ Of A Bank’s Reserves Were Misappropriated And Lost In Trading; Persons With Info Asked To Call FBI Or Lowndes County Sheriff’s Office

    BULLETIN: The SEC has gone to federal court in Atlanta, alleging that Aubrey Lee Price masterminded a $40 million investment fraud and that Price might have misappropriated millions of dollars from a “failing” bank in southern Georgia after a company he controlled bought a stake in the bank in 2010.

    The alleged misappropriation involved “substantially all” of the bank’s reserves, which were lost in trading, the SEC said.

    In June, some investors received a 22-page letter attributed to Price in which Price allegedly “admits that he ‘falsified statements with false returns’ in order to conceal between $20-23 million dollars in investor losses,” the SEC said.

    Price, 46, was believed to be living in Lowndes County, Ga., after moving there from Manatee County, Fla. But Price has gone missing, the SEC said.

    “Price raised nearly $40 million from investors and made woeful financial transactions that he hid from them,” said William P. Hicks, associate director of the SEC’s Atlanta Regional Office. “Now both the money and Price are missing.”

    Price managed an unregistered investment fund that went by the name of PFG LLC of McDonough, Ga., the SEC said.

    U.S. District Judge Timothy C. Batten Sr. has issued an asset freeze and temporary restraining order, the SEC said.

    The scheme began in 2008 and affected at least 100 investors in Georgia and Florida, the SEC said.

    “Price purported to invest fund assets in traditional marketable securities, but he also made illiquid investments in South America real estate and a troubled South Georgia bank,” the SEC said. “In order to conceal mounting losses of investor funds, Price created bogus account statements with false account balances and returns that were provided to investors and bank regulators.”

    Price also was associated with an entity known as PFGBI through which the banking investment was made, the SEC said.

    But the “investment in the bank is substantially worthless, as the bank’s cash assets have been substantially depleted and substantially all of the bank’s reserves (including U.S. treasuries and other liquid assets) were misappropriated by Price and lost in trading,” the SEC charged.

    “Goldman Sach’s records document at least $10 million in unexplained funds being transferred by Price from the bank to a trading account at Goldman Sachs,” the SEC said.

    Persons with information on his whereabouts should contact the Atlanta office of the FBI at 404-679-9000 or the Lowndes County Sheriff’s Office at 229-671-2985, the SEC said.