South Florida Arbitration & Litigation Lawyer Blog
SEC Charges Three South Florida Residents With Operating A Multi-Million Dollar Ponzi Scheme And Affinity Fraud Targeting Haitian-Americans
The Securities and Exchange Commission filed a civil injunctive action on October 16, 2009 against HomePals Investment Club, LLC and HomePals, LLC (together, “HomePals”), and their principals, Ronnie Eugene Bass, Jr., Abner Alabre and Brian J. Taglieri, alleging that they ran a Ponzi scheme and affinity fraud that targeted Haitian-American investors residing primarily in South Florida.
The SEC’s complaint alleges that from April 2008 through December 2008, the defendants raised at least $14.3 million through the sale of unsecured notes to hundreds of Haitian-American investors by promising guaranteed returns of 100% every 90 days. The defendants claimed they were able to generate such spectacular returns through Bass’ purported successful trading of stock options and commodities. The SEC’s complaint further alleges that, in reality, Bass traded no more than $1.2 million of the $14.3 million raised, generated trading losses of 19 percent, and that HomePals used the bulk of the investor funds to repay earlier investors in typical Ponzi scheme fashion. The SEC also alleges that Bass, Alabre and Taglieri misappropriated at least $668,000 of investor funds for personal use.
The SEC’s complaint, filed in the United States District Court for the Southern District of Florida, charges each of the defendants with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and, with respect to Bass, Sections 206(1), (2) and (4) and Rule 206(4)-8 of the Investment Advisers Act of 1940. The Commission seeks permanent injunctions, disgorgement of ill-gotten gains and financial penalties against all defendants.
Separately, on October 16, 2009, the U.S. Attorney’s Office for the Southern District of Florida announced the unsealing of indictments charging Bass, Alabre and Taglieri with securities fraud, conspiracy to commit securities fraud, wire fraud and money laundering.
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