$18 Million Prime Bank Scheme, SEC Says
DENVER (CN) - A Colorado Springs man defrauded investors of $18 million in a prime bank scheme and sent some of the loot to his son, the SEC claims in court.
The SEC claims Daniel Dirk Coddington, 59, led the fraud, with help from six other individual defendants, and six LLCs and corporations. It also sued five relief defendants, including Coddington's son, Daniel Scott Coddington, and the Coddington Family Truest.
Daniel Coddington "was the principal architect and primary beneficiary of the scheme," she SEC says in its federal complaint. "Coddington enlisted the other named defendants to participate in and assist him with the scheme, and they also profited substantially from their roles in the scheme."
Coddington and his cronies promised annual returns of 250 to 475 percent, the SEC claims.
According to the 52-page lawsuit: "Coddington's securities fraud followed the general pattern of 'prime bank schemes,' in which the perpetrators solicit the investment of cash or securities into a vaguely defined and ultimately nonexistent trading program, which purportedly involved leveraging the investors' assets to fund securities trading in order to generate promised astronomical profits. From in or about January 2010 through at least July 2011, Coddington and the other defendants obtained more than $18 million in cash and approximately $14 billion in face, or notional value, of securities known as 'Collateralized Mortgage Obligations' ('CMOs') from more than 18
investors nationwide for Coddington's program."
In essence, the defendants strung along their suckers through a string of lies, the SEC says in the lawsuit.
Here are the defendants: Daniel Dirk Coddington, Michael B. Columbia, Jesse W. Erwin Jr. [an attorney], Merlyn Curt Geisler, Marshall D. Gunn Jr. CPA, Seth A. Leyton, Lewis P. Malouf, Extreme Capital Ltd., Fidelity Asset Services Corp., Geisco FNF LLC, Golden Summit Investors Group Ltd., SouthCom Management LLC, and Stonerock Capital Group LLC.
The relief defendants are Daniel Scott Coddington, the Coddington Family Trust,
Joanna I. Columbia aka Joanna I. Ornowska, Vincent G. Farris, and Vincent G. Farris Co. L.P.A.
The SEC seeks disgorgement, injunctions and penalties.