SEC moves to halt alleged $23m Ponzi scheme

5 January 2009

An emergency court order has been granted to the Securities and Exchange Commission (SEC) to halt an alleged Ponzi scheme and affinity fraud that has collected more than $23 million from Haitian-Americans through a series of "investment clubs".

The regulator's complaint contests that a consortium known as Creative Capital and its principal George L Theodule have been soliciting cash from thousands of investors from as early as November 2007.

It alleges that Mr Theodule promised his backers a 100 per cent return within 90 days based on his trading of stocks and options.

However, the SEC said he actually amassed trading losses of $18 million over the past year and Creative Capital was paying returns using new investors' money.

Mr Theodule is also accused of comingling investors' funds with his own and misappropriating around $3.8 million for his personal use.

Linda Chatman Thomsen, director of the SEC's Division of Enforcement said: "This alleged Ponzi scheme preyed upon unsuspecting members of a close-knit community, attempting to take advantage of the trust they had in each other."

According to estimates from the US Census Bureau, around 548,199 Haitian-Americans live in the United States.

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