SANTA ANA, CALIF. (CN) – Irvine attorney Jeanne Rowzee helped two men steal $20 million in a $53 million Ponzi scheme that sold bogus PIPE (private investment in public equity) investments, the SEC says in Federal Court. The SEC says Rowzee, James R. Halstead of Santa Ana and Robert T. Harvey of Prosper, Texas, ran a classic Ponzi scam, paying off a few old investors with new money, swiping $20 million for themselves along the way.
According to the SEC complaint:
The defendants promised returns of 19 to 54 percent within 3 or 4 months.
Harvey formed a California LLC, Harvest Income, allegedly to invest in the PIPEs.
Halstead stole at least $10.4 million and spent it on trips to Las Vegas and “three luxurious homes.”
Rowzee stole at least $5.6 million and spent it on her home mortgage, credit card bills, and to buy property in Arizona.
Harvey stole $2 million and another $2.3 million in “management fees” and spent it on himself and on alimony.