The Securities and Exchange Commission has filed a federal lawsuit against several entities and individuals accused of orchestrating a $449 million Ponzi scheme. In a news release last week, the SEC announced it had brought charges and frozen assets of the defendants, who are from the Las Vegas area.
The commission said attorney Michael Beasley joined with Jeffrey Judd to create J&J Consulting Services, a company that would supposedly advance funds to tort plaintiffs who reached settlements with insurance companies. According to the complaint, Beasley, Judd and Christopher Humphries falsely told investors they would earn 12.5% returns each quarter through investments in J&J Consulting that were purportedly risk-free.
The defendants raised $449 million from hundreds of investors over a five-year period, but allegedly misappropriated the money to buy luxury homes, cars, boats and a private jet for themselves. As part of the scheme, the SEC said the defendants paid fictitious returns to investors, many of whom were members of their own church community.
“As alleged in our complaint, Beasley, Judd, and others enriched themselves through lies and deception, using their religious and community networks to fleece investors out of hundreds of millions of dollars after promising them a nearly 50 percent annual increase on their initial investment,” said Tanya Beard, Acting Director of the SEC’s Salt Lake Regional Office.
In its complaint filed in U.S. District Court for the District of Nevada, the SEC charged certain defendants with violations of the antifraud provisions of the federal securities laws, certain individual defendants with acting as unregistered brokers, and all defendants with engaging in an unregistered securities offering.
The commission obtained an asset freeze against Beasley and the others to prevent any further dissipation of investor funds. The SEC is also seeking permanent injunctions and disgorgement of ill-gotten gains plus interest and penalties.
Ponzi schemes are one of the many forms of securities fraud that can cause harm to investors. The attorneys at Hyman Cotter PC have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
