$300 Million Ponzi Scheme ensnares investors with Gold Mining Scam |
Date: Wednesday, June 16, 2010
Author: Hedgetracker.com
| The SEC has charged Milowe Allen Brost,
Gary Allen Sorenson and four other men with designing and perpetrating
an international Ponzi scheme that misled over 3,000 American and
Canadian investors. According to the SEC’s statement, the investment
scam cheated investors out of $300 million, primarily in personal
savings, home equity and retirement funds. “Brost and his sales team
presented themselves as an independent financial education firm,” the
SEC alleges, “that had discovered profitable investment opportunities
with companies involved in gold mining.” Mr. Brost and his team, who
called themselves Structurists as they “structured” their clients’
money, promised investors annual returns of 18 to 36%. In reality, Mr. Brost and Mr. Sorenson allegedly used investors’ money to finance shell companies that they themselves owned or controlled, transferring money “multiple times through numerous bank accounts held as far away as Asia, Europe and South America.” The money was ultimately transferred from Syndicated Gold Depository, which the two men ran through aliases, nominee shareholders and corporations, to Merendon Mining Corp. Ltd., which was controlled by Mr. Sorenson posing as a successful businessman. “Sorenson hosted tours for potential investors at his Honduran refinery,” the SEC claims, “and demonstrated the pouring of gold bars while making false claims about the profitability of his company.” Eventually the two men used investor funds and the scam’s Ponzi scheme architecture to pay off older investors. | ||