Regulator Orders Alleged Ponzi Scammers to Pay $15.7M Plus Interest
In its final judgement against ex-pro football player William D. Allen, Susan Daub, and three entities, the US Securities and Exchange Commission is ordering the defendants to pay over $15.7M in disgorgement of ill-gotten gains in addition to prejudgment interest for an alleged Ponzi scam that raised nearly $32M from investors. Allen, formerly of the Miami Dolphins, and Daub, who both pled guilty to related to criminal charges last year, have been sentenced to six years in prison. They must pay $16.8M in restitution for that action. The SEC’s order will be deemed met “based on the restitution order” in the criminal case.
The SEC’s complaint contends that Daub and Allen and the entities misled investors about the loans, which were supposed to go to professional athletes. Instead, they allegedly used just part of the money to issue the loans while using investors’ funds to cover nightclub and casino expenses, other ventures, and to pay back other investors.
Microcap Issuer and Its Ex-CEO Resolve Investor Fraud Allegations
Integrated Freight Corporation and its ex-chairman/CEO David N. Fuselier have settled SEC charges accusing them of investor fraud. Both Fuselier and the company, however, did not deny or admit to the allegations.
According to the Commission’s complaint, Fuselier tried to hide Integrated Freight’s poor financial state through the sale of a number of its subsidiaries, which were in debt and “non-performing,” to a related third party. Fuselier then allegedly hid the reason for the transfers from auditors and, over several years, compelled Integrated Freight to submit disclosures that were false and misleading to the SEC. He is also accused of signing certifications that were materially false related to the company’s quarterly and yearly reports.
To settle the civil charges, Fuslier must pay over $128K of disgorgement, more than $22K in prejudgment interest, and a $150K penalty. He also is barred from future penny stock offerings or from serving as a director or officer of a public company. Fuselier was previously the subject of another SEC case over similarly alleged misconduct involving a different company called New Leaf Brands.
Meantime, Integrated Freight will pay a $10K civil penalty.
SEC Freezes Assets of Rainbow Partners and Its Owner Who Claimed to be A Former Hedge Fund Manager
The SEC ordered an asset freeze and filed fraud charges against Michael F. Anderson and his The End of the Rainbow Partners, LLC. The Commission contends that Anderson told investors that he was a former hedge fund manager with a good track record. He claimed that he had a proprietary algorithm that he could use to day trade their money. He raised about $5.3M in investor funds.
Anderson also allegedly promised that up to 20% of money made from the trades would go toward his wife’s charity for abuse survivors. He purportedly said the rest of the profits would be split among investors.
Instead, claims the Commission, between 3/2014 and 2/2917, Anderson and his company misappropriated over $2.3M of investors by moving their money to his wife, her supposed charity, another company that she owned, and the hedge fund Bighorn Wealth Fund, LP, which Anderson managed. The misappropriated monies went toward covering the Andersons’ expenses, mortgage bills, tax debts, life insurance bills, credit card expenditures, and other personal bills.
Meantime, Anderson and his Rainbow Partners allegedly lost nearly $600K of investor money while claiming that the trades were profitable. He is accused of creating bogus account statements to make it appear as if there were profits. $1.9M of investor money was used to pay other investors.
Anderson, who is now deceased, admitted to most of the misconduct alleged in a sworn affidavit prior to his passing.
SEC Obtains Judgment Against Microcap Issuer and former CEO, SEC, November 17, 2017
More Blog Posts:
Ex- Investment Adviser is Accused of Defrauding Retirees of Over $1.85M, Stockbroker Fraud Blog, November 13, 2017
Texas Securities Fraud: Houston Investment Advisor Gets Five Years for Defrauding Investors and Prison Sentences are Rendered in $6.4M Diamond Investor Fraud Case, Stockbroker Fraud Blog, November 10, 2017