Securities and Exchange Commission Defendant Indicted in $30 Million Ponzi Scheme and Affinity Fraud Targeting Haitian-American Investors
The Securities and Exchange Commission recently announced that on July 2, 2013, the United States Attorney’s Office for the Southern District of Florida filed criminal charges against George Louis Theodule, a defendant in a now settled SEC action. The 40-count indictment charges Theodule with securities fraud, wire fraud, and money laundering. According to the indictment, Theodule, among other things, falsely presented himself as a financial expert who would double investors’ funds within three months by placing trades through their investment accounts. The indictment also alleges that Theodule operated a Ponzi scheme that raised more than $30 million from thousands of investors. Theodule allegedly perpetrated the fraud through Creative Capital Consortium, LLC and Creative Capital Concept$, LLC (the “Creative Capital entities”), among other entities he controlled.
In December 2008, the Commission halted Theodule’s on-going fraud at Creative Capital when it filed an emergency civil enforcement action against him and his companies. The SEC’s complaint alleged that the defendants had raised more than $23 million from thousands of mostly Haitian-American investors through a fraudulent, unregistered offering of securities nationwide, and operated a Ponzi scheme, having lost at least $18 million trading stocks and options through a network of purported investment clubs. The SEC obtained a restraining order to halt the fraudulent activity, and thereafter a receiver was appointed by the United States District Court for the Southern District of Florida to identify and trace assets. In October 2009, the Court entered a Judgment of Permanent Injunction and Other Relief against Theodule. The Judgment entered by consent, enjoined Theodule from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and also ordered Theodule to pay disgorgement with prejudgment interest and a civil penalty. In March 2010, the Court entered a Final Judgment ordering him to pay disgorgement in the amount of $5,099,512, prejudgment interest of $202,638 and imposed a civil penalty of $250,000.