U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23919 / August 24, 2017
Securities and Exchange Commission v. Sonya D. Camarco, Camarco Investments, Inc. and Camarco Living Trust,
No. 1:17-cv-02027 (D. Colo. filed Aug. 23, 2017)
SEC Obtains Asset Freeze Against Former Broker Charged with Stealing Client Funds
The Securities and Exchange Commission announced that it has obtained an emergency court order and asset freeze preventing a former Colorado-based broker from further dissipating stolen client assets.
According to the SEC's complaint, over the course of 13 years, Sonya D. Camarco, a resident of Colorado Springs, Colorado, stole money from her clients' accounts and then lied to her clients about the withdrawals. The SEC alleges that Camarco appears to have forged client signatures on checks made out to "C Investments," an entity Camarco used, and had the checks sent to a private post office box that she rented. Camarco also allegedly liquidated securities in her clients' accounts to make unauthorized payments to accounts she controlled. The complaint alleges that when confronted by clients, Camarco lied and told them that C Investments was an outside investment that she made on their behalf. The complaint alleges that when confronted by her employer, Camarco lied again, saying that she had no affiliation with C Investments and characterizing it as an outside investment held by one of her advisory clients. The SEC alleges that Camarco used the stolen client funds to pay her personal credit card bills and her mortgages.
The SEC also charged Camarco Investments, Inc. and Camarco Living Trust as relief defendants based on their alleged receipt of stolen client funds.
The SEC's complaint, filed in federal court in Colorado on August 23, 2017, charges Camarco with violations of Sections 17(a)(1) and (3) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The complaint seeks disgorgement of allegedly ill-gotten gains plus interest from all the defendants and seeks a permanent injunction against and penalties from Camarco.
LPL Financial and former advisor Camarco, who pleaded guilty to theft and securities fraud must pay at least $3.7 million in disgorgement and arbitration settlements; the total amount that may be awarded in arbitration hearings could climb above $11 million. Since 2013, LPL has paid an astonishing $135 million in fines to FINRA or the SEC per published company data as of September 2018.
Court Orders Wife of Accused Ponzi Schemer to Pay Millions of Dollars
Litigation Release No. 24348 / November 9, 2018
Securities and Exchange Commission v. Joseph Meli, et al.,
No. 17-CV-632 (S.D.N.Y. filed Jan. 27, 2017)
A federal court has ordered the wife of an accused Ponzi schemer to disgorge more than $4 million in investor funds.
The Securities and Exchange Commission charged Joseph Meli in January 2017 with fraud for running a Ponzi scheme. The SEC alleged that Joseph Meli raised money from investors to fund businesses purportedly created to purchase and resell tickets to such high-demand shows as Adele concerts and the Broadway musical Hamilton. Joseph Meli was criminally charged in a parallel case in which he pled guilty and was sentenced to a 78-month prison sentence. He also was ordered in the parallel criminal case to forfeit over $104 million, including a house in East Hampton, New York, and to pay over $56 million in restitution.
Jessica Ingber Meli is the wife of Joseph Meli. The SEC named Jessica Ingber Meli as a relief defendant for the purpose of recovering investor funds allegedly in her possession, including $3 million which was used to purchase the house in East Hampton in her name. She agreed to settle with the SEC, consenting to disgorgement and prejudgment interest of approximately $4 million. Because the house in East Hampton is subject to the forfeiture order entered against Joseph Meli in the parallel criminal case, approximately $3.2 million of the judgment will be deemed satisfied and Jessica Ingber Meli will be obligated to pay approximately $840,000.
Joseph Meli's co-defendant, Matthew Harriton, and several of Harriton's entities, settled the SEC's charges against them in July 2018. In September 2017, the SEC also charged Joseph Meli and New York sports radio personality Craig Carton with fraud for stealing millions of dollars from investors who were allegedly promised their funds would be used for the purchase and resale of concert tickets. The SEC's litigation against Joseph Meli and others in both cases is ongoing.
Principal of Mississippi Company Who Ran Multimillion Dollar Ponzi Scheme Sentenced to 19.5 Years Imprisonment in Parallel Criminal Action
Litigation Release No. 24347 / November 9, 2018
Securities and Exchange Commission v. Arthur Lamar Adams et al.,
No. 18-cv-252 (S.D. Miss. filed Apr. 20, 2018)
United States v. Adams, No. 3:18-cr-88 (S.D. Miss. filed May 1, 2018)
On October 30, 2018, the principal of a Mississippi company charged by the Securities and Exchange Commission with fraud for allegedly bilking at least 150 investors in a multimillion dollar Ponzi scheme was sentenced in a parallel criminal action to 19.5 years imprisonment.
The parallel criminal action arose from the same facts and circumstances alleged by the SEC. The SEC alleged that Arthur Lamar Adams lied to investors by telling them that their money would be used by his company, Madison Timber Properties, LLC, to secure and harvest timber from various land owners located in Alabama, Florida, and Mississippi, and promised annual returns of 12-15%. But Madison Timber never obtained any harvesting rights. Instead, Adams allegedly forged deeds and cutting agreements as well as documents purportedly reflecting the value of the timber on the land. Adams also allegedly paid early investors with later investors' funds and convinced investors to roll over their investments. According to the complaint, Adams used investors' money for personal expenses and to develop an unrelated real estate project. In the SEC action, Adams has consented to a permanent injunction, an asset freeze, and expedited discovery. The court overseeing the SEC action has appointed a receiver. The receiver has established a website, which contains information on the receiver's progress and on any relevant federal or state proceedings.
SEC Files Amended Complaint Adding Wives of Principal Defendants as Relief Defendants
Litigation Release No. 24346 / November 9, 2018
Securities and Exchange Commission v. Kevin B. Merrill, et al., No. 18-civ-2844 (D. Md. filed Sept. 13, 2018)
The Securities and Exchange Commission has named as relief defendants the wives of two defendants charged with running a Ponzi-like scheme that raised more than $345 million from over 230 investors across the U.S. The court overseeing the SEC's litigation has appointed a receiver and entered a preliminary injunction continuing an asset freeze until the case's conclusion.
The SEC alleges that Amanda Merrill and Lalaine Ledford, the wives of Kevin B. Merrill and Jay B. Ledford, respectively, received millions of dollars' worth of proceeds from the fraud their husbands and another individual ran in the form of real property, cash, luxury items and other goods, to which they have no legitimate claim. The SEC alleges that the wives have been unjustly enriched and seeks to have them disgorge their ill-gotten gains.
SEC Charges Florida Man in Day Trading Scheme
Litigation Release No. 24344 / November 8, 2018
Securities and Exchange Commission v. Ricardo H. Goldman, No. 1:18-cv-24678 (S.D. Fla. filed November 7, 2018)
On November 7, 2018, the Securities and Exchange Commission charged Florida resident Ricardo H. Goldman for fraudulently operating an unregistered securities day trading firm.
According to the SEC's complaint, Goldman misled dozens of day traders into thinking they were opening individual online securities trading accounts with Goldman's broker-dealer, America Capital Group LLC, which was not registered with the SEC. The SEC alleges that between at least November 2010 and August 2015, Goldman raised approximately $6.9 million from traders and then comingled their funds by placing them in a pooled master brokerage account that he controlled. Goldman allegedly concealed the comingling of the funds by giving traders online access to individual sub-accounts within the pooled master account. Goldman allegedly profited by charging traders a commission on their trades. According to the SEC's complaint, the pooled account ultimately sustained at least $3.6 million in trading loses. Because funds were commingled, traders were forced to share in the overall losses incurred in the master account. The complaint further alleges Goldman made material misrepresentations and omissions to traders regarding his background and disciplinary history which includes antifraud and securities and broker-dealer registration injunctions, a broker-dealer bar, and a state court conviction for grand theft and forgery.
The SEC's complaint, which was filed in the Southern District of Florida, charges Goldman with violating Sections 10(b), 15(a)(1), and 15(b)(6)(B) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and seeks permanent and conduct-based injunctions, disgorgement of ill-gotten gains with interest, and penalties.
Upon filing of the Commission's complaint, and without admitting or denying the allegations in the complaint, Goldman consented to the entry of a judgment that permanently enjoins him from violating the above-mentioned provisions of the federal securities laws, imposes a conduct-based injunction, and directs Goldman to comply with the Commission's Order dated November 19, 2008, In the Matter of Ricardo H. Goldman (Exchange Rel. No. 58976, Admin. Proc. 3-13293). The Judgment also orders Goldman to pay disgorgement of $470,000, prejudgment interest thereon in the amount of $53,497, and a civil penalty in the amount of $320,000.