The SEC
charged two executives at a Dallas-based medical insurance company with
operating a $10 million Ponzi scheme that victimized at least 80 investors.
The SEC alleges that the two executives
solicited investments for Global Corporate Alliance (GCA) by promoting it as a
proven business with a strong track record of generating revenue from the sale
of limited-benefit medical insurance. In reality, GCA was merely a start-up
company with no operating history and virtually no revenue. As they raised
investor funds, the executives used proceeds from new investors to pay returns
to existing investors. Once they couldn’t find any new investors, the
executives used a stall campaign of purported excuses to delay making any
further payments to investors.
“[The executives] raised millions of dollars
by lying to investors about their company’s business and history and their
planned use of investor funds,” said David Woodcock, Director of the SEC’s Fort
Worth Regional Office. “When they could no longer fuel their Ponzi scheme
with money from new victims, they told more lies in a failed effort to prevent
their scheme from unraveling sooner.”
David Peavler, Associate Director of the SEC’s
Fort Worth Regional Office, added, “[The executives] created fake monthly
statements to falsely portray GCA as a thriving health insurance company
successfully enrolling thousands of premium-paying policyholders each month. In
reality, they never had more than 40 policyholders, and half of those were
GCA’s own employees.”
For more information, visit SEC Charges Two Executives in Ponzi Scheme At Dallas-Based Medical Insurance Company.
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The attorneys at Sallah Astarita & Cox include veteran securities
litigators and former SEC Enforcement Attorneys. We have decades of experience
in securities litigation matters, including the defense of enforcement actions.
We represent firms and brokers nationwide. For more information contact Mark Astarita at
212-509-6544 or by email
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