Massachusetts Secretary of the Commonwealth William Galvin has filed an administrative complaint accusing private equity fund ARO Equity LLC, Timothy James Alcott, and Thomas David Renison of running a Ponzi scam that bilked investors of over $5.8M. Most of their victims were senior investors in their 70’s and 80’s who were allegedly promised 8-12% yearly returns over three-to-five years for their purchase of mostly promissory notes.
According to the Massachusetts Regulator’s complaint, Renison, Alcott, and ARO Equity invested just half of investors’ funds, with most investments made sustaining substantial losses. They allegedly ran their scam out of a trailer park in the city of Peabody despite listing their address at the One International Place Tower in Boston. Meantime, the two men have purportedly paid themselves more than $1M since their alleged Ponzi scam began.
Renison, who allegedly made $710K, was barred from the securities industry by the US Securities and Exchange Commission in 2014 for promissory note fraud involving a client. He was ordered by a jury to pay a $1.4M judgment in that matter. A criminal charge for conspiring to commit wire fraud was brought against him in a parallel case that was dismissed following his cooperation and testimony against a co-conspirator.
Despite the permanent industry bar, Renison helped set up ARO Equity in 2015. Galvin’s office said that Renison tried to hide his involvement from creditors and regulators by getting paid through the bank accounts of family members.
Among the investors that were bilked in this alleged Ponzi scam are a number of Renison’s ex-insurance and investment advisory clients. A number of senior investors used funds from their retirement accounts after they were persuaded to transfer the money to a self-directed IRA so they could invest in ARO Equity.
Alcott, Renison, and ARO Equity are accused of not disclosing Renison’s disciplinary and criminal past, ignoring the terms of notes that they sold that were “explicit” in stating how investors’ money would be used, and telling investors that their funds were “generally safe and somehow garuanteed.”
Meantime, monthly “returns” to ARO Equity investors actually came from funds paid by other investors as befits a Ponzi scam.
Our senior financial fraud lawyers work with older investors in their families that have suffered losses in a Ponzi scam or some other type of fraud. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.
Galvin’s Complaint (PDF)
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