HOUSTON (CN) - A financial adviser already sued by the SEC for a corporate bond offering that allegedly defrauded investors of $39 million was criminally charged with running a $1 million Ponzi scheme, federal prosecutors said.
Brian Bjork, 43, of Missouri City, Texas is charged with defrauding nearly a dozen investors in a one-count information.
The SEC sued Bjork and the estate of his former boss J. David Salinas in Federal Court on Aug. 1, 2011.
In that case, the SEC claimed that Bjork and Salinas, who died on July 17, 2011, apparently of suicide, ripped off more than 100 investors with their phony bond offering, and took $13 million from at least 52 investors by selling securities issued by two private funds, then used $3 million of it "for undisclosed affiliated transactions."
In announcing the new, criminal charges, the U.S. Attorney said in a statement: "Bjork was a registered investment adviser employed at companies owned and operated by Salinas, including J. David Financial Group and Select Asset Management. Bjork also served as treasurer of a nonprofit organization known as the Houston Athletics Foundation (HAF).
"The criminal information alleges that during his employment at those companies, and while serving as treasurer of HAF, Bjork orchestrated an investment fraud scheme whereby he would he would solicit and obtain funds from individuals and entities under the false pretense that he would either invest those funds in Salinas' pawn shops or use those funds to purchase corporate bonds being offered by Salinas.
"In truth and in fact, according to the complaint, Bjork kept those funds and used them to support his own lifestyle and to pay prior investors.
"In order to accomplish this fraud, Bjork established a Bank of America account under the name Brian A. Bjork dba J David Financial Group, an account for which he was the sole signatory.
"Bjork then perpetrated his fraud by largely preying upon current and former family members and utilizing his position as the treasurer of HAF to fraudulently obtain funds and convert them for his own use."
Citing the SEC lawsuit, the U.S. Attorney's Office said, "the criminal investigation alleges Bjork's culpability for this 'scam within a scam' whereby Bjork allegedly defrauded a subset of the J. David Financial investors, including HAF, of nearly $1.5 million."
Prosecutors said Bjork will be ordered to appear in court "in the near future."