Florida Resident Charges With Ponzi Scheme Targeted at Church Members
On July 27th, 2023, the Securities and Exchange Commission (SEC) announced securities fraud charges against a Florida resident. Brent Seaman stands accused of perpetrating a $35 million Ponzi scheme. Notably, the investment fraud scheme was targeted at members of church congregations. This type of investment fraud is sometimes referred to as “affinity fraud.” In this article, our Miami Ponzi scheme attorney provides an overview of the allegations put forward by federal regulators.
Ponzi Scheme Charges: Investors Falsely Promised Safe, Above-Market Returns
The SEC has charged Brent Seaman and several associated entities with fraudulently raising about $35 million from more than five dozen different investors in Florida. Federal regulators contend that Mr. Seaman was operating a “Ponzi-like” scheme. Notably, the investment fraud scheme was
primarily targeted at elderly investors and church-connected investors. Mr. Seaman was himself an active member of the Naples, FL church in question.
The investment fraud scheme was operated between June of 2019 and September of 2022. According to the allegations raised by the SEC, Mr. Seaman falsely promised safe investments with guaranteed returns between 18 and 48 percent. He claimed that investor funds were to be used to facilitate technology investment and currency trading. The SEC contends that Mr. Seaman lost millions in investor funds and misappropriated money for personal use.
Defendants Reach Settlement in Ponzi Scheme Fraud Case
The complaint involves multiple violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Notably, a securities fraud settlement has been reached in this case. It is still subject to court approval. Among other things, it enjoins the defendants from violating the charged provisions, bars Mr. Seaman from serving as an officer or director of an SEC-reporting company, and involves more than $1.4 million in disgorgement/restitution for investors.
Ponzi Schemes Will Inevitably Fail
Broadly defined, a Ponzi scheme is a type of financial fraud that will inevitably fail due to its fundamentally unsustainable structure. It was named after Charles Ponzi—a notorious investment fraudster who gained infamy after using this fraudulent investment strategy. While individual Ponzi schemes can be extremely complicated, the core concept is relatively straightforward:
A Ponzi scheme works by using funds from new investors to pay returns to earlier investors, creating the illusion of a profitable enterprise. New recruits are often enticed with promises of unusually high returns. However, the scheme relies entirely on the constant recruitment of new participants, as there are no legitimate investments or profits being generated. As the number of new investors required to sustain the scheme grows, it becomes increasingly difficult to attract sufficient funds.
Speak to a Ponzi Scheme Investment Fraud Attorney in South Florida
At Carlson & Associates, P.A., our Miami Ponzi scheme fraud lawyers fight to help investors secure compensation for their financial damages. If you or your loved one got defrauded by a Ponzi scheme, please do not hesitate to contact us today for a completely confidential initial consultation. Our Ponzi scheme lawyers represent investors in Florida and beyond.
Source:
sec.gov/news/press-release/2023-142
