Wednesday, July 6, 2005

Duo Allegedly Targeted Christian Ministries and Non-Profits in Investment Scam

The SEC filed a civil injunctive action in Texas alleging that Stanley Leitner and Bradley Stark, the latter a convicted felon on supervised release at the time, engaged in a fraudulent scheme that raised $13.8 million from Christian ministries by promising that some of the returns on the investments would be used for charitable purposes.  The SEC complaint (here) alleges that the defendants touted Megafund Corp., a Texas company, as an investment vehicle to pool funds for "risk free" investments, and that $11 million was transferred from Megafund to an account with a bank in the Netherlands Antilles -- better known as a black hole in the world of off-shore banking; the SEC also alleges that the defendants used money for personal expenses.  Seventy investors were enticed with claims that an unnamed "Trader" at a "major U.S. Brokerage firm" would make the investments that would return 10% a month, or over 120% a year.  Once again, if it sounds too good to be true . . . . (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/07/duo_allegedly_t.html

Civil Enforcement, Fraud, Securities | Permalink

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