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Univ. of Toledo College of Law

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Wednesday, March 10, 2010

SEC Obtains Emergency Relief Against Ponzi Scheme Pitching Phony "Turkish Eurobonds"

On March 9, 2010, the SEC obtained an emergency court order to shut down a Ponzi scheme targeting retirees in California and Illinois by inviting them to estate planning seminars and later coaxing them to buy promissory notes for purported Turkish investments.  According to the SEC's complaint, USA Retirement Management Services ("USARMS") and managing partners Francois E. Durmaz and Robert C. Pribilski mass-mailed promotional materials to prospective investors and invited them to estate planning seminars held at country clubs and banquet halls. They gained retirees' confidence in follow-up meetings and portrayed themselves as educated and experienced in foreign investments specifically tailored to the needs of seniors. Durmaz and Pribilski then pitched what they represented as safe, guaranteed investments in "Turkish Eurobonds" through the purchase of USARMS promissory notes that would earn annual returns between 8 and 11 percent.

The SEC alleges that USARMS raised at least $20 million from more than 120 investors, but did not actually invest the money in Turkish Eurobonds as promised. Instead, returns were paid to earlier investors with funds received from new investors in Ponzi-like fashion. Durmaz and Pribilski further misused investor funds to finance their other businesses and purchase such things as luxury automobiles, homes, vacations, and web-based pornography. They also wired investor money into bank accounts belonging to individuals living in Turkey who are named as relief defendants in the SEC's case.

The U.S. District Court for the Central District of California granted the SEC's request for emergency relief for investors, including an order temporarily enjoining defendants from future violations of the antifraud provisions and freezing their assets.

http://lawprofessors.typepad.com/securities/2010/03/sec-obtains-emergency-relief-against-ponzi-scheme-pitching-phony-turkish-eurobonds.html

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Comments

The Unheeded Prophet:

This is the Bernie Madoff story all over again. I have been reporting this guy and his firm to the Illinois authorities for over 2 years. The authorities did not act and allowed the criminal activity to go on. This guy should have been stopped over 2 years ago.

Remember Harry Markopolos, the Greek financial guy who reported Madoff to the SEC several times over 10 years and they did nothing?

Posted by: Jim Mescall | Mar 14, 2010 7:06:48 PM

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