New York (HedgeCo.Net) – The SEC taken action to freeze the assets of Ponzi scheme involving U.S. and New Zealand-based companies peddling sham investment opportunities ranging from a bank trading program to kidney dialysis clinics.
Christopher A.T. Pedras, who has residences in Turlock, Calif., and New Zealand, misled his initial investors when his hedge fund encountered problems paying the promised 4 to 8% monthly returns. Pedras began steering investors to a different investment program to purportedly increase the value of their investment by 80% by funding kidney dialysis clinics in New Zealand. However, the money was never invested as promised. Earlier investors were paid supposed returns with funds received from newer investors, and Pedras stole more than $2 million and spent another $1.2 million on sales agents. The SEC alleges that the Ponzi scheme paid investors more than $2.4 million in “returns” using new investor money.
“Rather than conducting any legitimate business activity, Pedras and his partners were simply operating a Ponzi scheme that was ultimately doomed to collapse,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office. “This emergency action stops them from fraudulently raising any more money from U.S. investors.”
Pedras raised more than $5.6 million from at least 50 investors in the U.S. since July 2010 by selling securities in two phases, the SEC says.
According to the SEC’s complaint, during at least one conference call, Pedras advised investors not to respond if contacted by the SEC. He characterized SEC investor questionnaires as “fake” and stated that the SEC’s investigation was motivated by a “personal vendetta” against him.
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