SEC Sanctions “Fraud Guarantee” Principal for Fraud
U.S. District Court for the Southern District of New York entered a final consent judgment against Florida resident Lev Parnas, a Soviet-born businessman, for his role in participating in an offering fraud that raised millions of dollars from investors.
The U.S. District Court for the Southern District of New York entered a final consent judgment against Florida resident Lev Parnas, a Soviet-born businessman, for his role in participating in an offering fraud that raised millions of dollars from investors.
Lev Parnas’ notoriety is related to political ties with former New York City Mayor Rudolph Giuliani, landing him in legal trouble on numerous fronts due to his high-status, illegal activities.
According to the SEC’s complaint, from 2013 through mid-2019, Parnas and David Correia, his co-defendant, raised more than $2 million from investors through investments in their entity, Fraud Guarantee.
According to the filing, Parnas and Correia told potential investors that their funds would be used to develop products that would help customers recoup losses resulting from investment or consumer fraud.
The complaint further alleged that contrary to Parnas’s and Correia’s representations, the funds were instead largely used for personal expenses including travel, jewelry, cars and disbursements at a casino. As alleged, Parnas and Correia also falsely told potential investors that they had raised millions of dollars from other investors and that they had invested hundreds of thousands of dollars of their own money into Fraud Guarantee.
On May 6, 2022, the Court entered a partial judgment against Parnas by consent, permanently enjoining him from violating antifraud provisions. On May 9, 2022, the commission imposed an associational and penny stock bar on Parnas.
The final judgment orders disgorgement of $1.4 million, representing Parnas’ ill-gotten gains, and prejudgment interest of $378,844. Other parts of the charges remain to be settled.
