A Miami broker defrauded investors by siphoning money from retirees’ investments through a Ponzi scheme.
The SEC alleges the adviser conducted a Ponzi scheme with money he raised for the Sterling Investment Fund, which he fraudulently claimed invested in mortgages and properties in Florida and Georgia. Many of the adviser’s investors were public servants such as teachers and police officers who believed they were making safe investments for their retirement savings. The adviser promised investors there was no risk involved in the investment and further promised annual returns of eight to twelve percent. However, instead of investing their money, the adviser used the fund assets to pay personal expenses and make fictional returns to investors. The adviser created false reports of valuations to send to his investors.
“Williamson lured retired teachers, law enforcement officers, and others into believing that the Sterling Investment Fund was a safe investment generating significant returns,” said Eric I. Bustillo, SEC Regional Director. “Investors entrusted him with their retirement savings, and he spent it as his own money.”
According to the complaint filed by the SEC, one investor, a retired school teacher and church pastor, invested $125,000 into the fund. The same day as this transfer, the adviser transferred $10,000 from the fund to pay his personal credit card bill and a BMW car payment among other personal expenses. Later, the adviser paid $24,400 to some investors in the fund as “distributions,” and transferred another $24,000 to himself.
In a parallel action, the adviser was found guilty of criminal, as well as civil, charges. The adviser agreed to settle the civil charges for $748,050.01 in disgorgement. He also agreed to be permanently prevented from violating the antifraud provisions of the Investment Advisers Act of 1940, including misleading clients about investment strategies, the use of client funds, or his qualifications to advise clients.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.