SEC Stops Ponzi Scheme Targeting Elderly and Small Businesses
The Securities and Exchange Commission (SEC) recently obtained an asset freeze and temporary restraining order in an emergency action relating to a $6 million Ponzi scheme targeting dozens of investors, including many elderly citizens and small business owners.
According to the SEC, defendants Neil Burkholz of Boca Raton, Florida, and Frank Bianco of Pembroke Pines, Florida (working on behalf of their defendant companies, Palm Financial Management LLC and Shore Management Systems LLC) falsely told investors that they employed a highly profitable options strategy. But the SEC alleges that the defendants invested less than half of investor moneys, and those investments resulted in catastrophic losses.
The SEC further alleges that the defendants used the remaining investor moneys to repay other investors in a classic Ponzi scheme. The SEC also alleges that the defendants misappropriated nearly $900,000 of investor funds for personal use. Finally, the SEC alleges that the defendants transmitted false reports to investors, providing the false impression that the accounts had earned positive returns.
As stated by Carolyn M. Welshhans, associate director in the SEC’s Division of Enforcement, “The SEC’s emergency action is intended to protect prospective investors from future harm by halting what we allege is a brazen ongoing fraud that targeted many senior citizens and small business owners. Among other things, this emergency relief prohibits the defendants from soliciting new investors, freezes their assets, and orders them to provide a sworn accounting of their assets.”
Contact one of our Business Trial Group attorneys at 800-816-1031 if you believe you have a claim relating to the misconduct allegedly committed by Burkholz and Bianco, and their companies, Palm Financial Management and Shore Management Systems.
The Business Trial Group helps investors recover their financial losses on a contingency basis. We are only paid if we successfully recover money for you.
The Business Trial Group is part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices. Our attorneys regularly battle against brokerage firms, investment advisory firms, and banks, and have helped investors recover tens of millions of dollars of investment losses.