Hagens Berman Blog

Whistleblower News: Real Estate, Diamond Ponzi Scheme

by HB Whistleblower Legal Team

05/23/2019

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SEC Seeks Emergency Relief to Halt Prominent New York Developer’s Ponzi-Like Real Estate Investment Scheme

The Securities and Exchange Commission filed an emergency action charging Robert C. Morgan, a New York residential and commercial real estate developer, and two of his entities, Morgan Mezzanine Fund Manager LLC and Morgan Acquisitions, LLC, with fraud for siphoning and misusing investor funds. In its action, filed Wednesday, the SEC seeks an asset freeze and other emergency relief.

The SEC's complaint alleges Morgan financed his development projects in different ways, including through sales of securities directly to more than 200 retail investors, many of whom invested through their retirement accounts. Morgan represented to investors that their money would be used to improve multifamily properties, and based on these representations, raised more than $80 million. Instead, as alleged in the complaint, Morgan and his entities diverted investor funds to facilitate Ponzi scheme-like payments to earlier investors. read more »

SEC Obtains Emergency Order Halting Alleged Diamond-Related ICO Scheme Targeting Hundreds of Investors

The Securities and Exchange Commission today announced it has obtained a court order halting an ongoing $30 million Ponzi scheme targeting more than 300 investors in the U.S. and Canada. The SEC complaint unsealed Monday charges South Florida-based Argyle Coin, LLC, a purported cryptocurrency business, and its principal Jose Angel Aman with using investor funds to run a Ponzi scheme.

The SEC's complaint alleges that Aman operated Argyle Coin as a Ponzi scheme -- it used new investor funds to pay prior investors their purported returns.  As alleged, this fraud is a continuation of a scheme Aman orchestrated with two other companies he owns, Natural Diamonds Investment Co. and Eagle Financial Diamond Group Inc.  According to the complaint, Aman engaged in unregistered offerings of securities in Natural Diamonds and Eagle as early as May 2014, falsely promising investors that the companies would invest in whole diamonds to cut down and sell for huge profits. read more »