John Woods, an Atlanta financier and part-owner of the, Chattanooga Lookouts minor league baseball team, has been charged with running a massive Ponzi scheme for over a decade, WTVC in Chattanooga reports.
In a complaint filed in federal court, the Securities and Exchange Commission charged Woods and his investment firm Southport Capital with six counts of securities fraud. The SEC said Woods operated Horizon Private Equity, III, LLC and took in over $110 million from investors while promising them rates of return of 6 to 7% through investments in government bonds, stocks or real estate projects.
“In reality, the company generated little revenue; and the returns paid to investors largely came from the funds of later investors,” the SEC said. The complaint said Horizon did not earn any significant profits from legitimate investments.
The commission said the operation victimized 400 investors, many of them elderly, in 20 states. They could lose a substantial portion of their retirement savings when the scheme collapses, according to the complaint.
Furthermore, the SEC said the Ponzi scheme is continuing to operate and added, “The Commission believes that additional victims are being defrauded on a daily basis.”
In response to the SEC’s enforcement action, a federal judge issued a temporary restraining order to shut down the fund and stop Woods from operating his firm, while also freezing some of his assets.
An attorney for Woods was quoted in the report as saying, “The SEC’s allegations present only one side of the story, and we look forward to presenting Mr. Woods’ side in court, through the judicial process.”
Woods became one of the general partners of the Lookouts when his group purchased the team in 2014.
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