SEC charges allege $4M was stolen from U.S. Investors
A man is accused of raising $4 million by promising guaranteed returns and other enticements, while actually using investors’ funds for his own personal gratification.
The Securities and Exchange Commission has charged founder of Never Alone Capital LLC, with orchestrating a fraudulent scheme in which he is said to have told investors that their cash would be invested inequities. He built trust by claiming to be a hedge fund owner.
The SEC Complaint (filed in the US District Court for the Southern District of New York), charges founder with violating the anti-fraud provisions of the federal securities laws. Criminal charges have also been filed by the New York County District Attorney’s Office.
The SEC alleges that between 2018 and 2023 that he convinced at least 17 investors to participate in his scheme, but that he used much of their money to pay credit card charges for items including skin care and an adult-only subscription service.
“As our complaint alleges, he convinced investors to trust him by lying about his investment expertise and strategies and then stole their money,” said Samuel Waldon, Acting Director of the SEC’s Division of Enforcement.
Many of the investors were from the Spanish and Latino community who met the advisor through a financial education company.
As well as the alleged misappropriation of investors’ funds, the SEC says that he provided false statements to them showing positive performance for their money, while they were actually losing money.
The complaint notes that he eventually stopped responding to investors and, in 2022, revealed in an audio recording that he was fake and was stealing money from people.
CRIMINAL CHARGES
The criminal charges announced by Manhattan DA Alvin L. Bragg Jr. were detailed in a 26-count New York State Supreme Court indictment with one count of Grand Larceny in the First Degree, four counts of Grand Larceny in the Second Degree, five counts of Grand Larceny in the Third Degree, and two counts of Securities Fraud under the Martin Act, among other charges.
It's alleged that the founder claimed that his company had been profitable every year since it was founded in 2006. He also claimed to have $157 million in assets under management and provided false brokerage firm documents showing a balance of $197 million in assets in an account. The DA’s filing says that there was never more than $27,500 in the account.
The criminal filing also states that he only sent $266,285 from his firm’s operating account into which the $4 million from investors had been sent, including $2 million from one investor.
The charges are yet to be proven in a court of law.
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