Feds Press Sham-Investment Charges

Share this content:
Federal investigators have pressed charges against a group of telemarketers and unregistered brokers they accused of stealing $30 million from 1,800 victims through questionable investments that were marketed by telephone.


The Securities and Exchange Commission and U.S. Attorney's Office said they uncovered 10 such schemes, in which 20 percent to as much as half of the money obtained from investors went to pay telemarketers, while much of the rest went to unregistered brokers as sales commissions.


According to the SEC, the schemes included:


· Three motion picture ventures, which raised about $13.1 million from investors for securities in movie development firms. Half the proceeds went to telemarketers, and the rest went to unregistered brokers;


· Three medical technology ventures, which raised more than $13 million for investment in firms that develop medical devices and software. But 20 percent to 30 percent went to pay broker sales commissions despite claims that only 12 percent of the money would be used for commissions.


· Three telecommunications ventures, which raised $2.9 million for businesses to establish long-distance telephone services over the Internet. However, $1.2 million went to unregistered brokers.


· An in-line hockey rink venture, which raised $650,000 from 52 investors for stock in a company that purported to be engaged in building roller hockey rinks. Thirty percent of the proceeds went to telemarketers.


The schemes occurred between 1996 and 2001, the SEC said. Federal authorities began their investigation in 2001.


The SEC has filed civil charges against 50 individuals and 31 corporate entities. The commission seeks court injunctions to halt the schemes in addition to reimbursement of the money raised in the ventures, as well as civil penalties.


The U.S. Attorney's Office has filed criminal charges against 53 individuals, seven of whom have already pleaded guilty. These charges carry maximum penalties of 10 years in prison, $1 million fines and payment of restitution to investors.


Loading links....
close

Next Article in Marketing Strategy

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here