The US Securities and Exchange Commission (SEC) has filed fraud charges against David Sims and Mario Procopio accusing them of running a $1.4M prime bank scam that defrauded 13 investors. ALC Holdings, LLC, Sims Equities, Inc., and El Cether-elyown, which are companies that they control, are also defendants in the investor fraud scam. This is not the first time that the SEC has charged Sims in relation to alleged fraud.
The regulator contends that the two men mostly found their investors through referrals given to them by associates and friends. Between 4/2014 and 5/2017, Sims and Procopio allegedly told those whom they solicited, usually by phone, that their investments would go into “prime bank” financial instruments that would make returns of 1200-40,000% percent.
Procopio and Sims falsely touted “special access” to trading platforms that they claimed also were used by rich investors, corporations, and governments to purchase huge amounts of currency, usually $500M to $1B, at a reduced rate from different banks. The notes could then supposedly be sold for an up to 30% profit.
Investors were allegedly told that they would be able to “piggyback” their funds on these platforms and make large returns while not exposing themselves to any risk at all. They were shown fake balance sheets, bank statements, and other documents.
The SEC said that the trading platforms and financial instruments were not real and, in fact, never existed. Instead, the two men allegedly used almost all of investors’ funds to pay for their own personal expenses, including jewelry, autos, golf excursions, and travel.
The men’s attorney, Ralph Greaves, is facing SEC charges for aiding and abetting the alleged prime bank fraud, including telling investors that Procopio and Sims had paid other investors returns of up to 400% even though he did not know of even one time when an investor had received a return.
Prime Bank Fraud
In a 2015 Investor Alert, the SEC warned that “prime bank” investment programs are ‘fraudulent.” They typically involve the supposed purchase and trade of “prime bank instruments,” tout “guaranteed, high returns,” and promise “little or no risk.” Those behind the fraud will usually use “official-sounding” and “complex” terms to market the scam.
Often, promoters of a prime bank fraud may “falsely claim” that the investments involved are guaranteed by the International Monetary Fund, the Federal Reserve, or some other well-known organization. A sense of “exclusivity” in terms of who can supposedly get in on the investment may be touted, perhaps even with the added draw that this is the “secret way” that rich people get wealthier.
The SEC said that prime bank fraud scammers may avoid using the term “prime bank” when advertising their supposed program.
Investor Fraud Lawyers
At Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm), our prime bank fraud lawyers are here to help investors in recouping their losses caused by the fraudulent actions of others. We work with retail investors, high net individual investors, and institutional clients throughout the US. We have helped thousands of clients in recouping many millions of dollars in losses. Contact SSEK Law Firm to request your free, no obligation, case consultation.