The Securities and Exchange Commission has charged a former Marine with swindling dozens of investors out of $2.5 million through a Ponzi scheme, Wealth Management reports.
The SEC filed a complaint last month in U.S. District Court for the District of Massachusetts against Christopher Aubin and his companies, Anchor State Capital LLC and Anchor State Properties LLC., accusing them of misappropriation and misuse of investor assets. Aubin is accused of defrauding 24 investors, two of whom were Marine Corps veterans who had served with him. The complaint states that Aubin and relief defendant Ashley Corcoran “engaged in a fraudulent scheme and made and used false and misleading statements in connection with the sale of Anchor State securities.”
According to the SEC, Aubin and Corcoran issued Anchor State securities to investors in the form of “Investment Contracts,” “Real Estate Partner Contracts” or “Partner Contracts.” The contracts promised investors they would be repaid their principal and their investment profit when the investment contracts matured, from the principal and interest payments made by the loan borrowers.
“In truth”, the SEC said, “Defendants made very few real loans to borrowers and instead used investors’ funds largely to make payments to earlier investors and to pay for Defendants’ own
business expenses and the personal expenses of Aubin and Relief Defendant Corcoran. Those personal expenses included lavish meals, luxury travel and vehicles. Defendants’ scheme thus
has many hallmarks of a Ponzi scheme.”
Aubin allegedly claimed his firm could offer investment opportunities as a short-term lending company making high-interest loans to borrowers for property or real estate investments. Aubin pledged to use investors’ funds for loans as an alternative to traditional financing and promised returns between 12% and 19% for investments lasting between one and eight months. Investors paid Aubin with wire transfers, checks and cash (in some instances).
According to the commission, when selling the investments, Aubin touted his trustworthiness as a veteran. The SEC also said he kept the scheme going longer than it might have by convincing some investors to roll over the principal and promised interest from maturing investment contracts into new investment contracts with a higher balance. In this way, the defendants were able to avoid the need to make payments on some investment contracts.
In mid-2024, the defendants were sued in state court by two investors whose investment contracts had matured but had not been repaid in full. Other investors who were in a similar position joined in that lawsuit in December 2024.
The SEC states that Aubin and Corcoran “have failed to repay at least $2 million in investment principal to investors with matured investment contracts,” which does not account for the investment returns that the two promised to these investors. The commission is seeking restraining orders on Aubin, Corcoran, and Aubin’s firms, as well as disgorgement and civil penalties.
Aubin could not be reached for comment prior to publication by WealthManagement.
The attorneys at Hyman Cotter PC were formerly senior attorneys in the SEC’s Division of Enforcement. We have represented clients in regulatory matters while working at Morgan Stanley and in private practice at some of the world’s largest law firms. Therefore, we understand the complexities that come with being the subject of a regulatory inquiry, and we have the experience to guide and advise you through any type of regulatory investigation. If you are the subject of a regulatory proceeding, contact Hyman Cotter PC at (866) 435-2031 or through our online contact form for a free consultation.
