Tuesday, November 20, 2007
The SEC filed charges stemming from a $250 million offering fraud that it describes as a "brazen scam" and involved phony Las Vegas casino and resort telecommunications deals, which victimized as many as 1,200 investors, many of whom were senior citizens. The SEC's action charges Detroit-area resident Edward May and E-M Management Co. LLC with selling investors shares of limited liability companies that they claimed had received revenues from telecommunications equipment and services contracts with hotels, casinos, resorts and similar establishments, many of which were purportedly located in Las Vegas. In fact, no such contracts ever existed. To perpetrate their fraudulent scheme, May and E-M relied on a network of individuals, some of whom organized "investment seminars" to entice investors to invest with E-M.
The Commission's civil injunctive complaint, filed in the U.S. District Court, Eastern District of Michigan, alleges that May, through E-M, raised as much as $250 million between 1998 and July 2007. Both orally and in writing, May and E-M allegedly promised returns in the form of monthly payments to investors for a period as long as 12 to 14 years, and "guaranteed" that investors, at a minimum, would receive the promised payments for approximately the first 20 to 24 months after they invested.