September, 2011:

Securities and Exchange Commission v. Jody Dunn, Case No. 4:11-CV-00577 (USDC E.D. Tex.).

Affinity fraud is alive and well in today’s investment world.  While most investors realize this, it is likewise inconceivable, to people, that it will happen to them.    Unfortunately, anyone can be taken advantage by fraudsters.  One such example is described below.

SEC CHARGES SOLICITOR IN INVESTMENT SCHEME TARGETING DEAF COMMUNITY

Recently, the Securities and Exchange Commission (SEC) filed a civil injunctive action in the United States District Court for the Eastern District of Texas against Jody Dunn (Dunn).

The complaint alleges that, over a three-year period, Dunn, who is deaf, solicited investments from others in the deaf community for Imperia Invest IBC (Imperia). The Commission previously charged Imperia with securities fraud and obtained an emergency court order to freeze its assets.

According to the complaint, Dunn solicited more than $3.45 million as part of Imperia’s investment scheme from several thousand deaf investors. Dunn failed to tell investors that he was using a portion of their funds to pay his mortgage, car loans, car insurance and a variety of other personal expenses. Dunn sent the remaining amounts to Imperia’s offshore bank accounts in Costa Rica, Panama, the British Virgin Islands, Cyprus and New Zealand. Investors have never been paid any interest after giving their money to Dunn to invest, nor were their funds ever invested. Even after the Commission charged Imperia and issued an investor alert about the scheme, Dunn continued to reassure investors that Imperia was legitimate and they would be paid.

The Commission alleges that Dunn did not attempt to verify whether Imperia was actually investing the money as promised. He also failed to verify whether Imperia was licensed to sell securities in any state, whether any registration statements relating to the offers or sales of Imperia securities were filed with the Commission, or whether Imperia was registered with the Commission in any capacity.

The Commission’s complaint charges Dunn with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder. The Commission also seeks civil penalties and disgorgement against Dunn.