Los Angeles Bus Drivers Targeted in Ponzi Scheme

March 4th, 2010
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The SEC has charged investment advisory firm Mitchell, Porter & Williams, Inc. (MPW) and its principal Thomas L. Mitchell with fraud after halting the firm’s $14.7 million Ponzi scheme. According to the SEC press release, the firm targeted retired bus drivers in Los Angeles, pressuring them to invest their retirement funds in MPW and promising them “fixed interest returns ranging from 10 to 15 percent annually for three or six-year terms.”

However, in classic Ponzi scheme style, the SEC alleges that instead of investing the money, Mr. Mitchell used new investments to finance the payments due to existing investors. In addition, Mr. Mitchell “diverted approximately 20 percent of new investor money for himself in the form of “operating expenses” and used it to fund his luxury car payments, mortgage payments, payments for a cruise, and tickets to sporting events.” The SEC halted the scheme with an emergency court order.
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Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News

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