The Securities and Exchange Commission filed an emergency action in federal district court today against the operators of an alleged ongoing south Florida-based alternatives investment scheme, one of whom has a prior felony conviction and is on parole after nearly 20 years in prison.

The SEC brought the emergency asset freeze and fraud charges against Castleberry Financial Services Group and president T. Jonathan Turner, a felon who has been convicted of multiple fraud, theft and forgery felonies and was imprisoned from 1998 to 2016.

Castleberry, Turner and the firm’s CEO Norman M. Strell defrauded at least 15 investors nationwide out of $3.6 million using an alternative investments-themed scheme that promised investors the firm had “hundreds of millions of dollars in capital invested in local businesses and a portfolio of hundreds of investment properties,” according to the SEC.

Castleberry offered investors guaranteed returns ranging from 7.93% to 12.23% per year, depending on the fund and the number of years invested, with an additional 0. 76% if the interest was paid annually. Contrary to its representation that it managed seven separate funds, Castleberry pooled investor funds in one bank account that was controlled by Turner and Strell, the SEC said.

The firm claimed to offer the high yields on “surety-protected equity-like fixed income funds” that protected investors’ principal by having it "fully insured and bonded" by CNA Financial Corp. and Chubb Group. In fact, the insurance companies had no relationship with Castleberry and did not authorize it to use their logos in Castleberry's sales materials, the SEC stated.

The SEC's complaint alleges that Turner and Strell misused investor funds to pay personal expenses and transferred other funds to businesses they controlled and to family members.

The complaint also alleges that Castleberry falsely stated on its website and in promotional materials that Turner has extensive finance industry experience, a MBA degree, and a law degree, while concealing that “Turner has been convicted of multiple fraud, theft, and forgery felonies and was imprisoned from 1998 until 2016,” the SEC’s complaint stated.

In fact in 1995, Turner, then known as Jon Barri Brothers, was convicted in Miami-Dade County Circuit Court of multiple felony charges of organized fraud, grand theft and forgery, and was sentenced to probation. Turner subsequently violated-his-probation-and-was incarcerated· from 1998 through-September-2016. He is presently under parole supervision until 2021. Neither Turner nor Strell have ever been registered with the SEC in any capacity.

"We received an investor tip during the partial government shutdown that provided critical evidence. The team then moved quickly to halt the alleged ongoing fraud," said Eric I. Bustillo, Director of the Miami Regional Office. "We encourage anyone that suspects potential investment fraud to report it to the SEC."

Judge Robin L. Rosenberg of the U.S. District Court for the Southern District of Florida granted the SEC's request for a temporary restraining order and temporary asset freeze against the defendants, and issued an order directing the defendants to provide a sworn accounting.