Washington, D.C., Oct. 18, 2012 — The Securities and Exchange Commission today charged a purported money manager and two of his chief marketers with defrauding investors in a fake company he created that bore a similar name to what was formerly one of Germany's largest banks.
The SEC alleges that Geoffrey H. Lunn of Sheridan, Colo., operated the $5.77 million investment scheme with assistance from Darlene A. Bishop of Odessa, Texas, and Vincent G. Curry of Las Vegas. Lunn portrayed himself as the vice president of Dresdner Financial, a firm whose executives he claimed had connections to Dresdner Bank and was purportedly planning to purchase several other banks to expand its operations. Lunn, Bishop, and Curry solicited investors throughout the U.S. and in several foreign countries for their ".44 Magnum Leveraged Financing Program" that they promised could turn an investment of just $44,000 into $2 million within 10 to 12 banking days. However, Dresdner Financial was not a real company and investor money was not used for any investment purpose. Lunn withdrew the money in cash and Western Union transfers, paid hundreds of thousands of dollars to Bishop and Curry, and gave nearly a million dollars to three Las Vegas call girls.
"Lunn, Bishop, and Curry created an aura of credibility by inventing a fictitious firm with a name similar to a legitimate company," said Robert J. Burson, Associate Regional Director of the SEC's Chicago Regional Office. "But their 100 percent guaranteed investment program and the astronomical returns they promised were nothing more than an elaborate hoax."
According to the SEC's complaint filed in federal court in Denver, the scheme occurred between February 2010 and February 2011, and the securities offered were never registered with the SEC as required under the federal securities laws. Lunn, Bishop, and Curry told investors that Dresdner offered 100 percent guaranteed rates of return through a process involving the lease and monetization of bank instruments. Curry and Bishop marketed the program directly to potential investors through phone calls, e-mails, and other communications. Lunn held conference calls with marketers and investors to explain the workings of the program.
According to the SEC's complaint, Lunn admitted in sworn testimony during the SEC's investigation that, "It was a con, basically." Lunn admitted that he did not lease any bank instruments, obtain any insurance wraps, monetize any bank instruments, or place any money into trading platforms as represented to investors. Nor did he return the money to investors. When Lunn, Bishop, and Curry were unable to repay investors after the promised 10 to 12 days, they perpetuated the scheme by repeatedly postponing the payout dates and claiming the delays were due to holds placed by banks or the government.
The SEC alleges that Lunn did not invest any investor funds as promised and instead began making cash withdrawals after the very first investor deposit. In October 2010, Lunn began making payments to three women he met in Las Vegas whom he described as "call girls." Lunn testified that he gave at least $848,500 to the three women so that they could have "a better type of life." In November 2010, Lunn used investor money to make a $1 million Ponzi-like payment to a favored investor who he thought "was a deserving person." Lunn paid $1.3 million to marketers of the scheme, including more than $650,000 to Bishop and Curry. Lunn used the remaining investor funds to pay for his personal and business expenses.
According to the SEC's complaint, Lunn also testified to SEC investigators that it was a "one-eyed man" using the alias "Robert Perello" who actually created Dresdner and the Magnum program. Lunn testified that Perello told him that he named the program accordingly because "when people found out they'd been ripped off, they would buy a .44 Magnum and shoot themselves in the head." Lunn claimed that Perello threatened to kill him and his family if he did not cooperate in the Dresdner scheme, and that he gave the cash he withdrew from investor funds and the Western Union transfers to Perello. Lunn is the only person who claims to have met Perello in person, saying he does not know Perello's true identify or current whereabouts and that his only distinguishing characteristic is that he has just one eye. Despite Lunn's assertions, no individual resembling Perello has been identified or located.
The SEC's complaint alleges that Lunn, Bishop and Curry violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, the antifraud provisions of Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the broker registration provisions of Section 15(a) of the Exchange Act. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.
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1 comment:
Gamblers, all of them.
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