Securities Law Prof Blog

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

A Member of the Law Professor Blogs Network

Tuesday, April 14, 2009

SEC Charges Church Leaders in Queens N.Y. with Affinity Fraud

On April 14, 2009, the SEC filed civil injunctive actions in the United States District Court for the Eastern District of New York charging seven leading members of a church in Queens, N.Y. for orchestrating a fraudulent investment scheme that targeted mostly elderly parishioners. According to the complaint, the seven individuals defrauded scores of investors of more than $12 million by making numerous misrepresentations, including promises of returns as high as 75 percent, to encourage them to invest in two hedge funds - the Logos Fund and the Donum Fund. Instead of investing the money as promised, the defendants misappropriated millions of dollars to furnish their own lavish lifestyles with purchases of luxury cars, jewelry, clothing, meals, and expensive foreign travel.

According to the Commission's complaint, the fraudulent scheme was orchestrated by seven individuals who were active members and leaders of the church: Isaac I. Ovid; Aaron Riddle; J. Jonathan Coleman; Stephen Cina; Cory A. Martin; Timothy Smith; and Robert J. Riddle. The Complaint alleges that these individuals used two entities to carry out the fraudulent scheme: Jadis Capital, Inc. - the hedge fund manager of the Logos Fund and the Donum Fund - and Jadis Capital's subsidiary, Jadis Investments, LLC, a registered investment adviser and the investment manager of the funds.  The SEC's complaint alleges that between January and November 2005, the defendants raised more than $12 million from more than 80 investors in the two funds by making material misrepresentations including promises of incredible returns.

The SEC's complaint charges each of the defendants with multiple violations of the federal securities laws.. The SEC's complaint seeks a final judgment permanently enjoining the defendants from future violations of the above provisions of the federal securities laws, ordering them to disgorge their ill-gotten gains plus prejudgment interest, and ordering them to pay civil monetary penalties.

http://lawprofessors.typepad.com/securities/2009/04/sec-charges-church-leaders-in-queens-ny-with-affinity-fraud.html

SEC Action | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef01156f267d62970c

Listed below are links to weblogs that reference SEC Charges Church Leaders in Queens N.Y. with Affinity Fraud:

Comments

variable annuites fraud

Posted by: michael sandu | Jun 12, 2009 3:40:05 PM

Post a comment