$1.2 Billion Heisted. Ponzi scheme in the Villages, Florida.

A Ponzi scheme  is a financial scam where early investors are paid returns with money from later investors rather than legitimate investment returns. A big time Ponzi scheme occurred in Fla. recently. The most recent “huge Ponzi” was Bernard L. Madoff Securities, LLC, involving as much as $65 Billion. Well, this one was $1.2 Billion which is still bad enough.

A Villages, Florida, resident and four companies were charged in an enormous Ponzi scheme by the SEC for unlawfully selling securities of Woodbridge Group of Companies LLC to unsuspecting clients. The SEC previously charged the now bankrupt company, Knowles Systems, Inc., its principal and others with operating a  $1.2 billion Ponzi scheme.

One defendant is Lynette M. Robbins, a cosmetologist who lived with Theodore F. Leutz at 731 Evans Way in the Villages. The Wall Street Journal reported that Knowles Systems Inc. and Robbins, its chief executive and owner, was the highest earning agent for Woodbridge. A SEC report said she received at least $8.1 million in commissions. Other Florida-based defendants sold more than $243 million of its unregistered securities to about 1,600 retail investors.

It is unlawful to sell unregistered securities in a “public offering” of securities, unless certain exemptions from application from registration requirements of the securities laws are complied with. In a private offering of securities, sales of securities can be effected without registration to “accredited investors.” But in all cases, the anti fraud provisions of the Securities Laws apply. State laws also prohibit sale of securities by unregistered broker deals or persons who have not received an exemption from registration as broker-dealers. http://www.brokerfraud.net

The SEC complaints allege that the defendants earned millions  in commissions for sales of Woodbridge securities, but were not registered as broker-dealers and permitted to sell securities.

The defendants touted Woodbridge as  “safe and secure”, but sold unregistered Notes. The Notes were far from “safe and Secure”  Radio, television and internet marketing were used to solicit investors, with seminars held to  solicit investors.

Woodbridge later filed for bankruptcy. Investors then stopped receiving interest payments and have not received a return of their investment principal. Woodbridge has since agreed to settle the liability portion of the SEC’s charges and reached a resolution with the SEC and creditors in a bankruptcy action regarding the ongoing control and management of the company. The SEC’s monetary claims against Woodbridge are pending.

In its latest actions, the SEC filed charges seeking court-ordered injunctions, return of some principal, with interest and financial penalties against the remaining defendants.  Robbins and her company agreed to settle the SEC’s charges and return more than $1 million in funds plus interest. Robbins also agreed to pay a $100,000 civil penalty.  Knowles Systems also filed for bankruptcy, saying it lost two-thirds of its revenue when Woodbridge collapsed.

 

Anthony M. Abraham, Esq., PC, has represented many investors who have claimed against Bankrupt and other estates for return of assets taken through fraud. Anthony M. Abraham, Esq., PC is experienced in churning and unauthorized trading claims. If you were victimized in this Ponzi scheme and need help, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@Abrahamattorneys.com.http://www.brokerfraud.Net