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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, May 2, 2008

SEC Obtains Freeze of Assets of Alleged Ponzi Scheme

The SEC obtained a court order halting a $25 million fraudulent scheme allegedly perpetrated by Laguna Hills, Calif.-based Safevest, LLC and its principals, Jon G. Ervinand John V. Slye.  The U.S. District Court for the Central District of California issued an order freezing assets and appointing a temporary receiver over Safevest and its affiliates. 

The SEC's complaint alleges that since at least May 2007, the defendants have raised at least $25 million from more than 500 investors, including many from the Christian community, misrepresenting that investor funds would be pooled and invested in futures commodities trading, that the investment would generate daily profits ranging from 1.5% to 1.9%, and that investors could receive their money back within 72 hours of requesting it. In reality, according to the complaint, no investor money was invested in futures trading, and requests by investors for withdrawal of their funds have either not been honored or have only been partially honored. The complaint further alleges that, undisclosed to investors, the defendants paid more than $18 million to investors in Ponzi-like fashion. The defendants also allegedly misappropriated investor funds for the personal use of Ervin, Slye, and their family members.

The Commission also seeks preliminary and permanent injunctions, disgorgement, and civil penalties against all defendants.

http://lawprofessors.typepad.com/securities/2008/05/sec-obtains-fre.html

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