SEC Charges Florida Residents As Part Of Nearly $6 Million Ponzi Scheme
On May 4th, 2023, the Securities and Exchange Commission (SEC) announced charges in a nearly $6 million Ponzi scheme case. The federal agency alleges that Cedric Dewayne Griffin defrauded more than 100 investors out of at least $5.9 million. Notably, regulators contend that Mr. Griffin’s scheme—which used real estate as a hook—was targeted at African American investors. Within this blog post, our Miami Ponzi scheme investment losses lawyer highlights the key things to know about the enforcement action taken by the SEC.
Ponzi Scheme Charges: Cedric Dewayne Griffin of Florida
The SEC has lodged a lawsuit against Cedric Dewayne Griffin of Jacksonville, Florida. The federal agency is accusing him of defrauding at least 103 investors out of nearly $6 million. According to the agency, Mr. Griffin used a securities fraud scheme that shared many similarities with a typical Ponzi scheme. The complaint—which was filed in the United States District Court for the Northern District of Florida—contends that Mr. Griffin duped investors into buying promissory notes from his firms, G8 Equity LLC and G8 RE Capital LLC. Investors were promised safe, well-above market returns. promising lucrative returns from real estate investments, which never materialized. The SEC is now seeking a permanent injunction, restitution plus interest, civil penalties, and an officer-and-director bar.
A Ponzi Scheme is Often Kept Afloat By the Shuffling Around of Money
At its core, a Ponzi scheme involves the paying off the original investors with the funds of new investors. The survival of a Ponzi scheme is often anchored in the clever shuffling of funds. In effect, a Ponzi scheme is a complex financial shell game. The orchestrator uses incoming investment money to pay out “returns” to earlier investors. It is an illusion of profitability that is then used to lure more individuals into investing, perpetuating the scheme. Of course, a Ponzi scheme is, by definition, not sustainable. The increasing need for fresh funds to maintain the cycle eventually leads to its collapse when incoming investments fail to cover the promised returns.
Real Estate is Often Used as the “Hook” in Ponzi Schemes
Real estate is frequently the bait used to lure victims into Ponzi schemes. The allure of the property market, with its promises of high returns and perceived stability, makes it a compelling front for fraudsters. They exploit investor trust and lack of industry knowledge, making grandiose claims about the profits to be made from property purchases, renovations, and sales. In reality, the funds are rarely, if ever, invested in real estate. The duped investors are left with promissory notes of non-existent assets, while the scam artist pockets their hard-earned money.
Contact Our Miami, FL Ponzi Scheme Investment Losses Attorneys Today
At Carlson & Associates, P.A., our Miami Ponzi scheme investment losses attorneys go above and beyond to provide a high level of legal representation to investors. If you or your family member suffered losses in a Ponzi scheme, we are here to help. Contact our Miami law office today for a confidential consultation. We represent investors in Ponzi schemes throughout Florida.
Source:
sec.gov/litigation/litreleases/2023/lr25707.htm
