The Securities & ExchangeCommission on Wednesday charged a California man and his three companies with securities fraud for stealing an estimated $1.6 million from at least 23 investors in a series of Ponzi schemes.
The SEC alleges that Steven L. Hamilton, 42, of Carlsbad, Calif. solicited investors through the Internet and direct solicitation to invest in one of three bogus companies that he as managing partner owned and operated: Verde Retirement LLC; Verde FX Nevada LLC; and Covenant Capital Partners. The alleged activity took place from 2007 through February 2011
The SEC complaint claims that Hamilton told Covenant Capital investors they were investing in real estate loans secured by deeds of trust. At the same time he, told Verde Retirement investors they were investing in either real estate loans secured by deeds of trust and certificates of deposit, and also told Verde FX investors they were pooling their money to invest in the construction of a new FedEx distribution facility in Las Vegas.
The SEC contends that Hamilton never placed any investor money in real estate loans secured by deeds of trust, certificates of deposit or a FedEx facility. Instead, the agency says he used the $1.6 million he raised to pay his personal living expenses and return capital to investors. To execute his scheme, the SEC claims Hamilton used a portion of the investment money he raised to pay fictitious returns to investors, when in fact his investments were non-existent and he was actually using investors' monies to pay other investors.
The SEC is seeking permanent injunctions against Verde Retirement, Verde FX, Covenant Capital, and Steven Hamilton, the forfeiture of any ill-gotten gains, prejudgment interest, and a civil penalty against Hamilton.