SEC charges Ponzi scheme targeting African immigrants
The Securities and Exchange Commission charged two Maryland companies and their principals for a scheme that allegedly defrauded approximately 1,200 investors, many of them African immigrants, of more than $27 million.
According to the SEC’s complaint, companies 1st Million LLC and The Smart Partners LLC falsely told investors that their funds would be used by a team of skilled and licensed traders for foreign exchange and cryptocurrency trading, promising risk-free returns of between 6% and 42%. The complaint alleges that the defendants often targeted vulnerable African immigrants and exploited their common ancestry and religious affiliations. According to the complaint, the defendants diverted investor funds for personal use and to make Ponzi payments to prior investors.
The SEC’s complaint, filed in federal court in Greenbelt, Maryland, charges the defendants with violating the antifraud provisions of the federal securities laws and seeks permanent injunctive relief, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.