Ponzi Offered Alzheimer’s Cure, SEC Says

LOS ANGELES (CN) - A 72-year-old securities recidivist bilked investors for $1.2 million, through his company Your Best Memories International, and spent the money collecting cars, the SEC claims in court.

Robert Hurd, of Los Angeles, was ordered in 2009 to cease and desist selling securities in Pennsylvania, the SEC says in its federal complaint. That lawsuit involved his company Smokey Canyon Financial, which is a relief defendant in the new complaint.

The SEC also sued Kenneth Gross, 76, of Northridge, who worked for Hurd and Your Best Memories.

Hurd sold unregistered securities, purportedly to raise money for his memory-improvement company, the SEC says in the complaint. He also claimed that one of his products had U.S. FDA approval to treat Alzheimer's disease.

He used new money to pay off old promises and "funneled investor funds to himself and [to] relief defendant Smokey Canyon, a corporation he controlled. The funds re-routed to Smokey Canyon by Hurd were used, among other things, to finance Hurd's private car collection," according to the SEC complaint.

Hurd's company, YBMI, claimed to be raising money for a Massachusetts-based company called Moving Pictures, which claimed to have products to stop memory loss and "restore memories in individuals suffering from Alzheimer's" the SEC says. It also sold coconut oil as "Your Best Memory Oil."

These people, whoever they are, are no identified by name in the complaint, but Hurd cut a deal with them to sell securities for them, taking a 60 percent cut for himself, the SEC says. Hurd and Gross began selling YBMI "securities" in California in the summer of 2010, and supervised other telephone sales agents, the SEC says. They used a scripted pitch, claimed to have "two proven treatment for Alzheimer's disease," and promised 8 percent a year.

But it was a Ponzi scheme, the SEC says.

It seeks restitution, disgorgement, penalties and an injunction - since that Pennsylvania injunction worked so well.

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