Douglas Vaughan charged with $80 million Ponzi scheme, Fraud List surpasses $86.3 billion

March 25th, 2010
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The SEC announced today that it has halted yet another Ponzi scheme, charging prominent New Mexico realtor Douglas F. Vaughan with defrauding approximately 600 investors out of $80 million. With the addition of Mr. Vaughn, HedgeTracker.com’s infamous “Hall of Fraud” list now includes 84 firms that have allegedly taken almost $86,353 million from unknowing investors.

Through the Vaughan Company Realtors and Vaughan Capital LLC, Mr. Vaughn “issued promissory notes that he claimed would generate high fixed returns for investors” by investing in distressed real-estate opportunities. According to the SEC, Mr. Vaughan “relied entirely on new money raised from investors through both companies to fund Vaughan Company's ever-increasing obligations to note holders.”

The complaint alleges that the Mr. Vaughan’s businesses had losses of approximately $61 million, and that the money collected from investors were backed by assets that were 20 times less than the claimed equity it the firm’s investments. According to the SEC, “in direct violation of promises made, Vaughan transferred almost all of the money he raised from Vaughan Capital investors to Vaughan Company's operating account. He then used those funds to cover Vaughan Company's obligations to promissory note holders and its ordinary business costs.”
The SEC obtained an emergency court order to halt the scheme and its investigation is ongoing.
For Detailed Investor Profiles on these Investors, click below:
Vaughan Company Realtors
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News


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