The Securities and Exchange Commission shut down Tuesday an investment firm it described as a Ponzi scheme and which once had more than a dozen NFL players as clients.
In three years, Ware Enterprises and Investments Inc. attracted $16.5 million from more than 600 investors, primarily targeting blacks and Christians with ads that quoted the Bible and made religious references, the SEC said in a complaint.
The firm was operated by Warren Ware, who didn’t return a phone call to his office Tuesday.
Ware, 32, and his firm were charged with the sale of unregistered securities and four counts of fraud. The firm’s assets were frozen, even though the company was administratively dissolved last September for failing to file an annual report. A receiver was appointed to handle the firm’s operations, which may include refunds to some investors.
“It’s particularly pernicious that people would target certain groups, in this case low income groups who were vulnerable,” said John Mattimore, assistant regional director of the SEC’s Miami office.
Ware used seminars to recruit new investors and urged its investors to introduce the investment program to others, the complaint said. Investors in the program were guaranteed a 10 percent monthly return on their investment for the first 10 months, followed by a 5 percent monthly return. Other than their monthly check stubs, investors were provided no other account documents.
The company’s bank records, though, showed that only about $151,500 was in a purported hedge fund. About $11 million was paid to prior investors in the form of “interest” payments, $2.7 million was diverted to a brokerage account in the name of Ware enterprises and Ware misappropriated $2.4 million for himself, according to the complaint.
Ware also falsely claimed in his pamphlets that its Dreamkeeper Program was approved by the NFL, an investment would be risk-free and that the company was heavily invested in world markets, real estate and small businesses, the complaint said.
The Orlando-based firm and its Dreamkeeper Program attracted almost 20 NFL players.
Last July, the NFL sent out an advisory warning players to stay away from the firm, league spokesman Greg Aiello said Monday before the complaint was announced.
“Some of our players came to us, came to our security department to perform due diligence on an investment opportunity,” Aiello said. “Our security department came up with information suggesting there could be problems.”
