Securities Law Prof Blog

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

Tuesday, May 19, 2009

SEC Charges Northern California Residents with Fraudulent Multi-Level Marketing Scheme

On May 13, 2009, the SEC charged two Northern California residents and two of their companies, one of which is a purported savings and loan association, with securities fraud in connection with a multi-level marketing scheme. The SEC obtained an emergency court order freezing their assets and halting the scheme.  According to the complaint, Bich Quyen Nguyen, Johnny E. Johnson, and their entities, Sun Group and Sun Investment Savings and Loan, raised more than $9 million by promising guaranteed returns on high-yield instruments. Instead, the amended complaint alleges that the defendants misused investor funds for their own personal use or sent money to other entities under their control.

The SEC had previously charged two other entities, Empire Capital Asset Management ("ECAM"), and Sun Empire, and two individuals, Delilah Proctor and Shauntel McCoy, for also participating in the multi-level marketing scheme.

According to the SEC's amended complaint, Nguyen solicited investors through Sun Group and Sun Investment Savings and Loan and encouraged club leaders to find investors who were unemployed or recently bankrupt. Through Sun Investment Savings and Loan, Nguyen offered certificates of deposit with returns as high as 19.30%. Johnson represented to prospective investors that they could double their investment with Sun Group and could earn "many times more than 10% returns." Both Nguyen and Johnson promised a full guarantee for the original investment and profit. In fact, according to the amended complaint, Sun Investment Savings and Loan is not a savings and loan at all.

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it appears that defimation is occuring here. Any decent law firm would search to see if Sun has a international trading platform first, prior to commenting. Clearly Sun has set international trading platforms, seek and one will find the answers. Clearly the PIC`s and the SEC is on a money seeking witch hunt trying to commit funds extortion on foreign entities. Is it time for russia europe and China to lower the US credit rating from triple A to double A ? appears so ! If one looks at this case with any understanding of international trade and programs and platforms, one would understand what transpired. It is as clear as day and night to understand that the people who formed the PICs invested a portion of the funds and then mis directed the remaining funds for self usage. This is a simply case of embezzelment within the PIC`s only. The SEC will have no choice but to seperate the firms and the people in this case. Clearly Sun is not the guilty party and globably has the backing of foreign nations. Simple wake up and detail the facts . Again, this is simply a case of a couple of people forming their own company to make investments internationaly. These same people simple embezzeled the PIC `s funds. it appears that only a portion of funds may have been invested in SUN and the PICs were paid within the trade contract. The crime was committed outside of SUN and simply at the PIC level.

Posted by: know-nutting | May 28, 2009 7:40:52 AM

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Posted by: TVI EXPRESS Wealth Team | Nov 26, 2009 1:02:39 PM

Is it not time for Panama to close down permanently Hatfield Oak Internationl and all its subsidaries. They are not even properly licensed to do business in any country they have web sites in. ( shells ) They simply have a hairdressers license and a grocery store license. You are warned, beware and run as fast as you can away from these people NOW. Ponzi is a ligimate word according to any dictionary on earth, in any language.

Posted by: gary | Mar 12, 2010 8:22:15 AM

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