Charity and Frauds

For your attention, Charity and Frauds can go together.

According to the the press release, at SEC charges, “successful trader” and fraud, the defendants raised approximately $5.3 million from investors who were told that the defendant was a retired, successful hedge fund manager who intended to day trade their funds using a proprietary algorithm. Claiming he no longer needed income and instead wanted to help friends and charitable causes, the defendant told investors that he would fund his wife’s charitable organization, and divide the remaining profits among investors.

The SEC alleges that the funds were used to pay the defendants’ personal expenses. According to the complaint, the charity Foundation was a sham entity that never conducted any legitimate business.

Moreover, the defendant incurred substantial trading losses while falsely assuring investors that trading was profitable. To hide the losses the defendants generated and distributed fabricated account statements.