Tuesday, May 19, 2009
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.