SAN DIEGO (CN) – Somali immigrants from San Diego to Seattle have been ripped off for $3 million in a securities and check-cashing scam, the SEC says in Federal Court. Mohamud Abdi Ahmed, owner of Shidaal Express check cashing and money transfer, took $200,000 from a San Diego mosque in the scam he’s run since 2006, the SEC says.
Ahmed promised 60 percent annual returns – $500 a month for every $10,000 his victims handed over – the SEC says.
He told San Diego’s estimated 20,000-30,000 Somali immigrants that “their money was safe” and that he made money from stock trading and his “financial services.”
He made some payments in cash, but stopped paying in 2008, the SEC says.
San Diego is home to the fifth-largest population of Somali immigrants in country. Several people lost their life savings to Ahmed, who they trusted his promise that they could redeem their principal at any time, the SEC says.
Ahmed, 45, of Spring Valley, Calif., holds no securities license, is not registered as an investment adviser, and did not provide investors with any documents or receipts, according to the complaint.
He “threatened some investors who were inclined to cooperate with the FBI by telling them that he and his associates had a lot of ‘money and power,'” the SEC says. He allegedly told investors that “if they sued, they would get nothing.”
U.S. District Judge Jeffrey Miller granted their request for emergency relief and froze Ahmed’s assets, the SEC said in a statement. It also seeks disgorgement, penalties and an injunction.