SEC Charges Businessman and his Company in Massive Ponzi Scheme Case—He Falsely Claimed to Have Offices in Florida
On January 14th, 2020, the Securities and Exchange Commission (SEC) announced that it obtained an emergency asset freeze in an alleged $75 million investment fraud case. The agency believes that an Illinois-based businessman named Kenneth D. Courtright, III operated a Ponzi scheme through his company, Todays Growth Consultant Inc. In total, more than 500 investors, including investors in South Florida, are believed to have been affected by the fraud.
SEC Complaint: Todays Growth Consultants (Alleged Ponzi Scheme)
In a legal complaint filed in the United States District Court for the Northern District of Illinois, the SEC alleges that Kenneth D. Courtright, III operated a Ponzi-like scheme by soliciting investment funds in the company Todays Growth Consultant Inc. According to regulators, Mr. Courtright, III has falsely represented that his firm has offices in Naples, Florida. However, the SEC believes that these offices never existed.
Since 2017, Mr. Courtright, III has sold unregistered investment contracts directly to individuals in the United States and internationally. The agency argues that the contracts, which required investors to put in no actual effort beyond providing funds, are securities for the purposes of federal law.
False Promises of Guaranteed Returns
Pursuant to the terms of the investment contracts (the securities), Todays Growth Consultants promised investors a guaranteed minimum return—with an opportunity to make far more than that. To demonstrate how the “contracts” worked, the SEC highlighted the case of an unnamed individual known only as “Investor 1.”
In the Summer of 2017, Investor 1 put $150,000 into Todays Growth Consultants through one of its investment contracts. In return, Mr. Courtright, III promised that investor a minimum return of $2,250 each month—or the equivalent of a guaranteed 18 percent return annually, well above the market rate. Notably, the more money investors put into the company, the higher their promised minimum rate of return.
A Classic Ponzi Scheme Structure—Investors Funds Were Transferred Around
In reality, the agency believes that Mr. Courtright, III and Todays Growth Consultants failed to make legitimate investments. While the contracts stated that investor funds would be used exclusively for expenses related to building and operating an income-producing website for the customer, the SEC states that these funds were instead shuffled around to keep the scheme afloat. The funds of new investors were used to pay off the original investors.
To prevent more investors from being damaged, the SEC has taken emergency action to shut down the Ponzi scheme. The agency is seeking restitution for investors, return of any ill-gotten profits, and other civil penalties.
Call Our Miami, FL Ponzi Scheme Lawyers Today
At Carlson & Associates, P.A., our Miami Ponzi scheme lawyers represent victims of Ponzi schemes and broker fraud. If you suffered large financial losses in a Ponzi scheme, you need an experienced legal advocate on your side. Call us today for a fully private case evaluation. With an office in Miami, we represent investors throughout Florida.
Resources:
sec.gov/litigation/complaints/2020/comp-pr2020-10.pdf
sec.gov/news/press-release/2020-10
https://www.carlson-law.net/sec-halts-multi-million-dollar-ponzi-scheme-in-south-florida/