SEC Charges Ponzi Scheme Run out of Frat House

Jun 10, 2019

Former College Student Charged with Running Ponzi Scheme out of Frat House On June 3, 2019, the Securities and Exchange Commission announced an emergency action charging a recent college graduate with orchestrating a Ponzi scheme that targeted college students and their families.The SEC’s complaint https://www.sec.gov/litigation/complaints/2019/comp-pr2019-84.pdf alleges that Syed Arham Arbab, 22, ran his scheme out of a fraternity house near the University of Georgia campus. According to the SEC’s complaint, Arbab allegedly offered  hedge fund investments in “Artis Proficio Capital,” which he claimed had generated past annual returns of as much as 56% and for which the investments were guaranteed up to $15,000 in principal. Arbab also allegedly sold guaranteed “bond agreements” with a fixed rate of return. The SEC alleges that at least eight college students, recent graduates, or their family members invested more than $269,000 in these investments. The SEC’s complaint charges Arbab, Artis Proficio Capital Investments LLC, and Artis Proficio Capital Management LLC, with violating the antifraud provisions of the federal securities laws. According to the SEC’s complaint, there was no hedge fund at all, and Arbab created fake performance returns which he used to sell the fund to investors. Instead of investing the money in the hedge fund , Arbab allegedly invested the funds in his personal bank and brokerage accounts, which he used for his own benefit for shopping, entertainment and  travel to Las Vegas. As is the case with most Ponzi schemes, Arbab also allegedly used portions of new investor money to pay earlier investors who had asked for their money back. The SEC alleges that Arbab even instructed some new investors to send their money – unknowingly – to earlier investors through payment apps such as Venmo, Zelle, and Cash App, by representing that these payees were either a “partner” or “manager” in the fund. According to Richard R. Best of the Atlanta office of the SEC “[w]e allege that Mr. Arbab used his college affiliations to operate a Ponzi scheme that drained valuable resources from current and former students. This is a reminder that investors of all ages and experience levels—whether long-time investors or recent graduates investing funds from their first few paychecks—should carefully research investment opportunities and the people offering them.” Investors of all ages can fall victim to a Ponzi scheme, especially in situations where they know the perpetrator through a club or other social group, such as the fraternity in this case. If you or someone you know is a victim of a Ponzi scheme or other investment scam, call us today for a free consultation. Former Wall Street Attorney Melanie S. Cherdack represents investors in the United States and the Caribbean in claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-768-2499 or complete our contact form for a free consultation.

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Oasis International and others charged in $75 Million FOREX scheme

Apr 23, 2019

The Commodities Futures Trading Commission announced yesterday that it has filed a civil enforcement action in federal court in Florida against Sarasota area defendants Oasis International Group, Limited, Oasis Management, LLC, Satellite Holdings Company, Michael J. DaCorta, Joseph S. Anile, II, Raymond P. Montie, III, Francisco “Frank” L. Duran , and John J. Haas . The Complaint alleges that the defendants received approximately $75 million from pool participants for investment in two commodity pools—Oasis Global FX, Limited and Oasis Global FX, SA (collectively, the “Oasis Pools”)—that would purportedly trade in foreign currency exchange (“forex”). The defendants falsely represented that, among other things participants would receive a minimum 12% guaranteed annual return; the Oasis Pools had never had a losing month; there was no risk of loss with the Oasis Pools; and forex trading returns for the Oasis Pools were 22% in 2017 and 21% in 2018.  The defendants misappropriated the majority of pool funds and lost the remainder trading forex. As further alleged, of the approximately $75 million the defendants received from pool participants between mid-April 2014 and the present, the defendants deposited only $21 million into Oasis Pools’ forex trading accounts and lost all of those funds trading.  The defendants used over $28 million to make Ponzi-like payments to other pool participants, as well as spending over $18 million for unauthorized personal or business expenses such as real estate purchases in Florida, exotic vacations, sports tickets, pet supplies, loans to family members, and college and study abroad tuition.  The defendants also allegedly created and issued false account statements to conceal their trading losses and misappropriation from pool participants by inflating and misrepresenting the value of the pool participants’ investments in the Oasis Pools and the Oasis Pools’ trading returns. See the full CFTC press release https://www.cftc.gov/PressRoom/PressReleases/7915-19 If you believe that you are the victim or a Ponzi scheme or other investment scam, call us today for a free consultation.Former Wall Street Attorney Melanie S. Cherdack represents investors in the United States and the Caribbean in claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-768-2499 or complete our contact form for a free consultation.  

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