Global Finance & Investments, Prime Bank Fraud Alleged
I confess to not understanding how the prime bank fraud con is played, since on its surface there appears to be no attraction.
On July 18, 2007, the Securities and Exchange Commission ("Commission") filed a civil injunctive action in United States District Court in Sherman, Texas against Global Finance & Investments, Inc., ("Global Finance"), Charles R. Davis ("Davis"), Lucre Fund, LLC ("Lucre Fund"), JTA Enterprises, Inc. ("JTA Enterprises"), William H. Clark ("Clark"), Level Par Investments, LLC ("Level Par"), Kelly G. Rogers ("Rogers"), Sterling Meridian LLC ("Sterling Meridian"), Ronald J. Linn ("Linn"), Glenn Maske ("Maske") and William F. Dippolito ("Dippolito"). In its complaint, the Commission alleges that the defendants engaged in fraudulent conduct in connection with three related "high-yield investment" securities offerings. Between September 2005 and April 2006, Davis through his Atlanta-based company, Global Finance, raised a total of $9.9 million from over 100 investors located throughout the United States. As part of Davis's offering, two of his facilitators, Clark and Rogers, conducted separate fraudulent offerings and forwarded the proceeds of their offerings to Davis.According to the complaint, Davis falsely represented that Global Finance's investment program would earn returns ranging from 25 percent per month to 90 percent per week. Davis also claimed that the funds were safe because they would be deposited into an escrow account maintained by Dippolito, an attorney. Based on Davis's claims, Global Finance received a total of $9.9 million from Clark ($4 million), Rogers ($4.7 million) and another investor ($1.2 million). The Commission also alleges that JTA Enterprises and Lucre Fund, which are controlled by Clark (Denville, New Jersey), received investment proceeds from at least 65 investors raised by Linn and Maske through their entity, Sterling Meridian (Yorba Linda, California); Linn and Maske told the investors that they had access to legitimate high yield investments paying monthly returns of 18 to 20 percent.
The complaint also alleges that Rogers, through Level Par (Frisco, Texas), solicited 35 investors by representing that his investment, purportedly involving the trading of bank debentures, was totally secure and paid weekly returns of 25 percent. According to the Commission's complaint, the investment programs were shams and the investors' funds were used for purposes other than "investments," including the personal use of the promoters.
Finally, the Commission alleges that Dippolito, a Tacoma, Washington lawyer, acting as escrow agent and using the title "paymaster," promised he would secure the funds until Davis notified him that Global Finance would purchase an investment. Instead, Dippolito disbursed the funds to persons he knew were prior investors, for which he received a percentage-based fee.
The Commission also names in its complaint, as relief defendants, USAssets & Funding Corp. (Littleton, Colorado), Nevada Sentry Service Corp. (Milwaukee, Wisconsin), Wells Ventures LLC (Tucson, Arizona), Triquestra Management Corp. (Dallas, Texas) and CMR Mngt. Group, LLC (West Trenton, New Jersey).
The Commission alleges in its complaint that defendants Global Finance, Davis, JTA Enterprises, Lucre Fund, Clark, Level Par, Rogers, Sterling Meridian, Linn and Maske each violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission also alleges that Dippolito aided and abetted Davis's violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission further alleges that Clark, Linn and Maske violated Section 15(a) of the Exchange Act for acting as a securities broker without having been registered with the Commission.
The Commission is seeking against each of the defendants a permanent injunction and an accounting. The Commission is also seeking against each of the defendants, with the exception of Level Par, disgorgement plus prejudgment interest and a civil money penalty. Rogers consented to the entry of an injunction against him without admitting or denying the Commission's allegations. Rogers also agreed to pay disgorgement of $100,000 and a $50,000 civil penalty.
From the SEC complaint;
This matter involves three related fraudulent “high-yield” investment, or “prime bank," schemes uncovered by the Commission and the court-appointed receiver during discovery in the Commission’s civil injunctive action filed against Travis Correll and others (Correll civil action) for violations of the federal securities laws in a similar and related fraudulent high-yield investment scheme. SEC v. Travis Correll, et al. Case No.: 4:05-CV-472-RAS [EDTX/Sherman Division (December 7, 2005)] As Correll’s massive nation-wide Ponzi scheme was collapsing and facing inquiries from the Commission, Charles R. Davis through his company Global Finance & Investments, Inc. began conducting a new fraudulent scheme eventually raising a total of $9.9 million from over 100 investors located throughout the United States between September 2005 and April 2006.
Nice work, but isn't double dipping both illegal and fattening?
