LOS ANGELES (CN) - "Investment adviser" Thomas L. Mitchell targeted retired county bus drivers in a $15 million Ponzi scheme, the SEC says in Federal Court. Mitchell and his firm, Mitchell, Porter & Williams, persuaded retired Metropolitan Transit Authority bus drivers to take their pensions in a lump sum and hand them over to him, the SEC says.
Mitchell, 64, has run the scheme since 2000, and still is running it, the SEC says. He promised the retirees 10 to 15 percent annual returns from "promissory notes" from his companies, which include defendants The Adivinala AA Investment Trust and AB3 Inc., the SEC says.
"In reality, Mitchell is operating a Ponzi scheme, and has invested almost no investor money in the past year," the agency says. "Rather, between April and December 2009, Mitchell used the $1.4 million he raised from six new clients to make over $1 million in interest payments to existing investors, as well as keep over $300,000 in the form of payments to his adviser entity MPW."
Mitchell, of Los Angeles, took $14.7 million from 82 victims, the SEC says. It obtained an emergency ordering freezing his accounts. The court will hold a hearing on March 16 on the SEC's request for a preliminary injunction.
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