The SECcharged two executives at a Dallas-based medical insurance company with operating a $10 million Ponzi scheme that victimized at least 80 investors.
The SEC alleges that the two executives solicited investments for Global Corporate Alliance (GCA) by promoting it as a proven business with a strong track record of generating revenue from the sale of limited-benefit medical insurance. In reality, GCA was merely a start-up company with no operating history and virtually no revenue. As they raised investor funds, the executives used proceeds from new investors to pay returns to existing investors. Once they couldn’t find any new investors, the executives used a stall campaign of purported excuses to delay making any further payments to investors.
“[The executives] raised millions of dollars by lying to investors about their company’s business and history and their planned use of investor funds,” said David Woodcock, Director of the SEC’s Fort Worth Regional Office. “When they could no longer fuel their Ponzi scheme with money from new victims, they told more lies in a failed effort to prevent their scheme from unraveling sooner.”
David Peavler, Associate Director of the SEC’s Fort Worth Regional Office, added, “[The executives] created fake monthly statements to falsely portray GCA as a thriving health insurance company successfully enrolling thousands of premium-paying policyholders each month. In reality, they never had more than 40 policyholders, and half of those were GCA’s own employees.”
For more information, visit SEC Charges Two Executives in Ponzi Scheme At Dallas-Based Medical Insurance Company.
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