Four individuals have agreed to settlements after being charged for their involvement in a multimillion-dollar scheme that lured 3,600 investors into fraudulent investments, the Securities and Exchange Commission announced.
The scheme already ended with SEC charges filed against the Southern Florida firm, 1 Global Capital, and its owner for selling $320 million in unregistered securities to retail investors, the SEC said. The four newly charged individuals raised $24 million of those funds, the SEC said.
Newly charged are Chris A. Dantin of Baton Rouge, La., and Christopher D. Dantin of St. Francisville, La., father and son; as well as David P. Ortiz of Whittier, Calif., and Andrew L. White of Loveland, Colo. They are described by the SEC as 1 Global Capital’s top revenue producers, raising money for the firm from 2014 through 2018.
Without admitting or denying the charges, both Dantins and White have consented to settlements. Chris A. Dantin agreed to pay disgorgement of $22,818 with prejudgment interest of $2,403 and a $30,000 civil penalty. Christopher D. Dantin consented to pay disgorgement of $1,279,886 with prejudgment interest of $123,157 and a $100,000 civil penalty. White consented to pay disgorgement of $129,672 with prejudgment interest of $7,279, and a $30,000 civil penalty. The SEC is seeking disgorgement of allegedly ill-gotten gains with interest and a civil penalty for Ortiz.
Investors were erroneously assured their investments in the company were safe and secure and a good alternative to the stock market, the complaint said.
1 Global Capital, based in Hallandale, Fla., was a market cash advance firm that provided short-term loans to small and medium size business. The firm’s owner and CEO, Carl Ruderman, was charge earlier with fraud, as was the firm itself and other individual agents. Ruderman allegedly funded his lavish lifestyle with some of the investment money, and paid early investors in a Ponzi scheme, the SEC said.
The firm produced fraudulent marketing materials, including claims that the loans to businesses were repaid at $1.30 to $1.40 on the dollar, which supposedly generated lucrative investment returns. The agents distributed the false marketing materials, the complaint says.
The agents earned hundreds of thousands of dollars in commissions on their sales, even though they were not registered as broker-dealers or associated with registered broker-dealers, the SEC said. The SEC charged the four individuals with violations of securities registration regulations.
Others who were involved in the scheme were sentenced to prison terms earlier or are awaiting sentencing on criminal charges connected to the case. The investigation is continuing.