LAS VEGAS (CN) - A motley crew on two continents claimed their company Malom stood for "Make A Lot Of Money," but the SEC says it was a prime bank scam that grossed them $11 million.
The SEC sued Malom Group, M.Y. Consultants, M. Dwyer LLC and six people - two from Switzerland and four from the United States, in Federal Court. It claims they defrauded investors of $11 million in a prime bank fraud involving "overseas debt instruments."
Prime bank schemes are frauds in which operators claim to have special access to lucrative investments.
The SEC claims in the lawsuit that the defendants "defrauded more than 30 investors out of $11 million using forged documents, fake histories of success, and the promise of risk-free investments and astronomical returns. Orchestrating the fraud from Switzerland and Las Vegas, Nevada, the defendants lured investors into agreements and transactions with Malom that involved fictitious 'prime bank' instruments and exotic high-yield trading programs. In fact, Malom was nothing more than a sham company and the investments the defendants peddled were nothing more than vehicles used to steal investors' money. Several of the defendants, through at least October 2013, continued to lie to investors that transactions would occur or that refunds or returns were forthcoming."
The ringleaders were Malom's principals, Martin U. Schläpfer and Hans-Jürg Lips, the SEC says in the complaint.
Schläpfer, 55, aka Schlaepfer "is believed to be incarcerated in Zurich, Switzerland, where he has been since September 2011 pending an investigation by Swiss authorities into investment fraud involving Malom Group's offer of joint venture and structured note agreements, as well as a separate fraudulent scheme that took place between 2003 and 2011 involving the sale of surety bonds by another company Schläpfer controlled," the SEC says in the lawsuit.
Lips, 50, of Says, Switz., was tossed into a Swiss hoosegow in 2011, "pending an investigation by the Swiss authorities into investment fraud involving Malom Group's offer of joint venture and structured note agreements," according to the complaint.
Also sued is James C. Warras, 67, of Waterford, Wisc., the executive vice president of Malom. "Warras pled guilty in 2002 to felony charges that he made false statements in a sale of securities in Wisconsin. He was sentenced to probation and largely prohibited from offering or selling securities for five years," the SEC says in its 46-page lawsuit.
Joining these splendid corporate citizens as a defendant is Joseph N. Micelli, 70, of Las Vegas. "He describes himself as Malom's Compliance Officer," the SEC says. "He was an attorney, but was disbarred in California in 1997 for failing to provide clients notice that he was previously suspended by the bar for lying to clients. He is not licensed to practice law in any state."
Defendant Anthony B. Brandel, 46, of Las Vegas, is the sole director of defendant M.Y. Consultants. He and his company were Malom's "main point of contact with investors, explaining the investments, collecting investor funds through escrow agreements, and lulling investors about the status of their transactions," the SEC says.
Defendant Sean P. Finn, 44, of Whitefish, Mont., is founder and directors of defendant M. Dwyer LLC. He recruited suckers for Malom, according to the lawsuit.
The SEC seeks disgorgement, injunctions and penalties.
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