The US Securities and Exchange Commission (SEC) has filed fraud charges against two men claiming to be pastors of a church at a strip mall in Orange County, California. Kent R.E. Whitney and David Lee Parrish are accused of targeting members of their local Vietnamese community and defrauding investors of millions of dollars. The regulator has obtained an asset freeze in what it is calling a $25M Ponzi scam.
Whitney, who has a criminal fraud record, is the founder of The Church for the Healthy Self. The Commission said that he established the church three months after getting out of federal prison where he had been serving time for a different investment scam that had defrauded 10 investors of over $600K.
The regulator contends in its complaint that The Church for the Healthy Self’s investment program, called the CHS Trust, touted:
- Guaranteed, tax-deductible, and insured returns of “at least 12%” via options trading and reinsurance investments.
- “Safe and secure growth” along with no loss of principal or exposure to market drops.
- “Minimal risk” with the possibility of up to 43% yearly returns.
- That part of the profits would be directed toward investors’ charities of choice.
- Risk of loss would only occur in the event of a nuclear war.
- That investors would still be able to access their money to make big purchases, including pay for vacations.
Instead, the majority of the funds were allegedly stolen by Parrish and Whitney.
Parrish who allegedly helped Whitney with his earlier fraud, was a co-pastor at the Church. As the director of the CHS Trust, he solicited members of the Vietnamese community via radio and TV ads.
Whitney and Parrish are accused of stealing investors’ money and using some of their funds as “returns” in Ponzi-like fashion. Even after the Federal Bureau of Investigation was able to get a criminal seizure of the money in the CHS Trust, the two men allegedly continued to pursue investors.
According to Law360, just a few days before the FBI seizure on March 12, the two men took $400K of investor money out of a Bank of America (BAC) account. They had withdrawn $122K from the same account just three days prior.
Now, the SEC wants permanent injunctions, civil penalties, and disgorgement imposed on the two men.
Affinity scams tend to target a particular demographic or group whose members share identifiable commonalities. Our affinity fraud lawyers are here to help investors recoup their fraud losses. Contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today.