The Securities and Exchange Commission announced the resolution of its fraud action against Eric J. Dalius and the business he owned, Saivian LLC.
Dalius and Saivian LLC have agreed to pay $24 million in disgorgement, prejudgment interest and penalties to settle the SEC’s claims against them for operating a multi-million-dollar Ponzi scheme and offering fraud. The SEC’s litigation against Ryan Morgan Evans, a top executive in the Saivian scheme, is ongoing.
The SEC’s charged that, beginning in October 2015, Dalius and the companies he controlled under the umbrella name “Saivian” sold securities that entitled holders to receive 20% cash back on their retail shopping purchases every month in exchange for paying a $125 fee every 28 days and the submission of shopping receipts. The SEC’s investigation uncovered that Dalius and Saivian falsely claimed that the company funded these cash back payments to members by monetizing the point-of-sale receipt data submitted by its members.
Instead, they allegedly operated a Ponzi scheme by satisfying promised returns to some investors through the investments of others. Dalius and Saivian also allegedly operated a pyramid scheme that promised a daily residual income stream for affiliates who sold Saivian memberships to downline recruits. Dalius also allegedly hid his creation and ownership of the Saivian scheme and failed to disclose his 2001 criminal conviction for carrying out a prior multi-level marketing fraud to investors.
The settlement requires Dalius and Saivian LLC to jointly and severally disgorge $20.1 million, the net profits of the Saivian enterprise, plus prejudgment interest of $919,215.59, and to each pay a $1.5 million civil penalty. Dalius and Saivian LLC have agreed to settle the charges without admitting or denying the SEC’s allegations. The SEC says it plans to establish a fair fund to distribute the money received from the defendants to harmed investors.