Tuesday, December 11, 2007
The SEC obtained an asset freeze and other emergency relief to halt a massive pyramid scheme with as many as 70,000 victims in 64 countries. The scheme involving the purported sale of English and Spanish language tutorials particularly preyed on Hispanic communities in Orlando, Fla., and Puerto Rico. The SEC charged Robert Lane, Wealth Pools International, Inc., and Recruit For Wealth, Inc. with the fraudulent offer and sale of unregistered securities in the form of "Associate" memberships in an enterprise called Wealth Pools. The fraudulent offering began in 2005 and the defendants claim to have raised more than $132 million in 2007 alone, according to the SEC's complaint.
While Wealth Pools purports to be a multi-level marketing company primarily selling an English and Spanish language tutorial DVD called Talk-N-Tutor through a network of sales Associates around the world, the SEC alleges in its complaint that the DVD is, in reality, a front for Wealth Pools's true product - an investment in one or more "pools" that offer investors an opportunity to receive passive income through the efforts of others to recruit new investors.