🚨Texans Charged in $91M Ponzi Scheme
The SEC has charged three Texans for running a $91 million Ponzi scheme that duped over 200 investors. The fraudulent scheme promised high returns through international bond trading but ended in devastating losses and lavish spending by the accused.
Key Points
- •💸 Big Money: $91 million raised from over 200 investors
- •📅 Timeline: Scheme operated between May 2021 and February 2024
- •🤥 False Promises: Guaranteed monthly returns of 3% to 6%
- •🏡 Lavish Spending: Millions misappropriated, including a $5 million home
- •⚖️ Legal Action: SEC seeks permanent injunctive relief and civil penalties
💥 The Big Reveal
The SEC has dropped a bombshell with charges against three Dallas-Fort Worth residents: Kenneth W. Alexander II, Robert D. Welsh, and Caedrynn E. Conner. These three allegedly masterminded a Ponzi scheme that raked in a staggering $91 million from more than 200 unsuspecting investors. The trio promised guaranteed high returns through a trust called Vanguard Holdings Group Irrevocable Trust (VHG), but reality paints a very different picture.
📊 False Promises and Illusions
From May 2021 to February 2024, Alexander and Welsh convinced investors they'd receive monthly returns of 3% to 6% and their principal back after 14 months. They claimed VHG was a highly profitable international bond trading business with billions in assets. Conner pitched in by funneling over $46 million through his own related program, Benchmark Capital Holdings Irrevocable Trust (Benchmark). But as the SEC alleges, the returns were just Ponzi payments, and the so-called 'pay orders' protecting investments were as real as unicorns.
🏠 Living the High Life
Instead of generating real returns, Alexander and Conner allegedly misappropriated millions for personal luxuries. Think a $5 million home for Conner. The SEC is not amused. > "As we allege, the defendants conducted a large-scale Ponzi scheme that caused devastating losses to investor victims, while Alexander and Conner misappropriated millions of dollars of investor funds," said Sam Waldon, Acting Director of the SEC’s Division of Enforcement.
⚖️ The Legal Hammer Drops
Filed in the U.S. District Court for the Eastern District of Texas, the SEC's complaint charges the trio with violating antifraud and registration provisions of federal securities laws. The SEC is pushing for permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The investigation was a team effort by the SEC’s Fort Worth Regional Office, with litigation led by Jason Rose and supervised by Keefe Bernstein.