SEC Charges Southern California Firm with Operating a Ponzi-Type Scheme

(HedgeCo.Net) The Securities and Exchange Commission has filed fraud charges against JMJ Capital Group and its president and chief executive officer, Richard Lee Ramirez, with fraudulently raising millions of dollars from investors in Southern California.

The SEC’s complaint alleges that from at least 2019 through 2021, defendants told potential investors that they could earn returns of up to 30% through short-term investments in JMJ Capital, and that those investments could be easily withdrawn after expiration of a 30-90 day lockup period. The complaint further alleges that defendants claimed investor capital would be used to purchase receivables and personal protective equipment (PPE). According to the complaint, however, investors encountered difficulty withdrawing their investments, and defendants misappropriated investor funds to pay back earlier investors and to pay Ramirez’s personal expenses, including payments for luxury automobiles, trips to Hawaii, and tickets to Disneyland and Legoland. The SEC alleges that defendants raised millions from more than forty investors through these false representations.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of California, charges JMJ Capital and Ramirez with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder, and with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act. The complaint seeks permanent injunctions, disgorgement, civil penalties, and an officer-and-director bar against Ramirez.

In a parallel action, the U.S. Attorney’s Office for the Southern District of California filed criminal charges against Ramirez and JMJ Capital.

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