MIAMI (CN) – Two Florida men ran a $22 million Ponzi scheme that victimized more than 100 people, many of them retirees and teachers, the SEC says. It sued James Davis Risher and Daniel Joseph Sebastian in Federal Court.
Risher and Sebastian ran their game from 2007 through July 2010, the SEC says. They called it private equity funds, a “Managed Capital Fund,” a “Safe Harbor Private Equity Fund,” and a “Preservation of Principal Fund.”
“Risher boasted to investors that he had substantial experience in trading equities and providing wealth and asset management services. In reality, Risher had no such experience but rather a lengthy criminal history, spending 11 of the last 21 years in jail instead of growing a thriving retail brokerage business as he claimed,” the SEC said in a statement.
The men claimed their fund earned annual returns of 14 to 124 percent, and concocted bogus account statements and sent them out. “Only a fraction of the money raised was actually invested, and Risher instead misspent investor funds on such personal purchases as jewelry, gifts, and property in North Carolina and Florida,” the SEC said. “Risher and Sebastian also paid themselves millions of dollars in phony management and performance fees.”
The SEC seeks permanent injunctions, disgorgement and fines. It says Risher has been criminally charged as well.