Feds Bust Alleged Ponzi Scam in San Diego

SAN DIEGO (CN) – A San Diego man and his company MAK 1 Enterprises swindled hundreds of investors out of $70 million in a Ponzi scheme, the SEC says in Federal Court. Mohit Khanna, 32, “guaranteed” returns of up to 27 percent annually and 55 percent for shorter periods on high risk foreign exchange trading, the SEC said.

     Khanna persuaded investors to roll over their alleged profits and make new investments, issued bad checks when they asked for their money, and stopped answering the phone, the SEC said.
     Khanna transferred investors’ money to First Opportunities Management, which he owned and operated, and which had no connection and provided no services to MAK 1 or its clients, the SEC says. He spent the money on himself and his wife, according to the U.S. Commodity Futures Trading Commission and the California Corporations Commission, which sued Khanna in a separate complaint in the same court.
     Khanna stole $274,000 from his clients in the first quarter of this year, sent another $90,000 to an offshore account in Singapore, and paid more than $54,000 on behalf of his wife, Sharanjit Khanna, the SEC says. “Sharanjit Khanna also currently owns luxurious real properties that may have been purchased with investor funds.”
     Khanna lied to investors by claiming their money was protected by MAK 1’s insurance policies, that MAK 1 managed $50 million in assets, and that Khanna was an experienced trader with a six-year record of double-digit returns, the complaints allege.
     He failed to tell investors that he was barred in 2004 from associating with any member of the National Associations of Securities Dealers.
     Khanna sent investors statements from his accountant claiming that the accountant had reviewed MAK 1’s financial records and that the business was healthy and had $50 million in the bank, the complaint said.
     A letter from Khanna sent to investors with the accountant’s evaluation stated “I hope this information was a source of comfort to you, and it provides a source of great pride for me.”
     A phone call to Khanna at MAK 1 on Tuesday was not returned. Khanna is still soliciting investors, the SEC said. “As recently as July, Khanna raised almost $150,000 from a family associated with a charitable foundation in Texas, including one 81-year-old individual,” according to the complaint. Khanna told his victims this summer that the SEC was preventing him from paying them, and “openly ridiculed the [complaining] investors as being ‘nutcases,’ ‘whiners,’ and ‘losers,'” the SEC says.
     The SEC seeks disgorgement, penalties and an injunction.

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