Home News SEC Charges Texas Company, Principals in Alleged Multimillion Dollar Ponzi Scheme Targeting...

SEC Charges Texas Company, Principals in Alleged Multimillion Dollar Ponzi Scheme Targeting Seniors

The Securities and Exchange Commission has charged two Texas companies and their principals in a $2.4 million Ponzi scheme and in a related, $1.4 million offering fraud targeting retirees.

The Securities and Exchange Commission has charged two Texas companies and their principals in a $2.4 million Ponzi scheme and in a related, $1.4 million offering fraud targeting retirees.

The SEC’s complaint alleges that, from 2010 to 2017, Clifton Stanley ran a Ponzi scheme through his retirement planning and real estate investment business, The Lifepay Group LLC. Stanley is alleged to have lured at least 30 elderly victims to invest approximately $2.4 million of their retirement savings with promises and claims of outsized investment returns.

The SEC claims that he kept the scheme afloat for years by paying early investors with later investors’ funds and by convincing investors to roll over their investments. The SEC further alleges that Stanley pilfered from the estate of an elderly woman’s family trust, diverting nearly $100,000 to fund the Lifepay Ponzi scheme.

In addition, beginning in 2015, Stanley and Michael Watts allegedly orchestrated a second offering fraud through a company they controlled, SMDRE LLC, in which the pair convinced a group of predominantly elderly victims to invest roughly $1.4 million.

Stanley is said to have used roughly $1.3 million of the Lifepay offering proceeds for personal expenses, including country club memberships, daily living expenses, travel, and entertainment expenses. In addition, Watts and Stanley allegedly engaged in shell game transactions so they could use the majority of SMDRE investor funds for personal expenses and to keep the Lifepay Ponzi scheme afloat.

The SEC’s complaint charges Stanley, Watts, Lifepay, and SMDRE with securities law violations and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.

Click here to visit The DI Wire directory page.

Previous articleSecurities America Recruits Former NPH Wealth Management Firm
Next articleCarter Validus Mission Critical REITs Name New Chief Executive Officer