A Birmingham, AL, man has been sentenced to 25 years in an Alabama prison for violating provisions of the Alabama Securities Act; sources inform a New York Criminal Lawyer. In addition, he was also ordered to pay restitution to his victims totaling $1.64 million.
The sentencing completes the State of Alabama’s case against the master options trader, a moniker that he gave himself. The list of charges against the man included:
• He sold unregistered securities.
• He acted as an investment advisor without being registered in the State of Alabama.
• He committed fraud in the sale of securities and provided false investment reports.
• He committed fraud as an investment advisor and provided false investment reports.
• He committed fraud in the sale of securities for claiming that he had a degree in accounting when he did not.
• He committed fraud as an investment advisor for claiming that he had a degree in accounting when he did not.
• He committed fraud in the sale of securities for operating a Ponzi scheme.
• He committed fraud as an investment advisor for operating a Ponzi scheme.
The head of Alabama’s Security Commission (ASC) stated that “For those who conduct illegal securities business in Alabama, I have this to say: It will not be tolerated and we will take appropriate action,” sources confirmed to the NY Criminal Attorney.
The investigation began as a result of many complaints against the man and his company. The Ponzi scheme had grown to about 38,000 participants before authorities were able to close it down in 2003 and froze all of its assets. As part of their investigation, investigators learned that there were about 1,767 investors in this one plan that had unknowingly invested about $4.7 million.
A part of this scheme funds from those participants who are the most recent investors to the scheme are used to pay dividends to those who have been in the plan the longest. This gives the illusion that the plan is making money. This is a similar type scheme that Madoff had run from New York before he was arrested.
The head of the ASC advises those who are looking to invest, be sure to check them out and be sure they have a securities license in hand before giving them any money. He went on to add that the state maintains free information and tips to prevent fraud.
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