(CN) – The owner of Wealth Resources duped clients out of $6.5 million by promising to place invest in securities “that did not exist,” the SEC claims in Grand Rapids Federal Court. The SEC claims that Martin Wegener spent the money on himself, put it into other companies he owns, and doled out some of it in Ponzi payments.
Wegener, 43, of Grand Rapids, Mich., sent his clients bogus “brokerage account” statements, often for companies “that did not exist,” the SEC says.
Wegener was an employee and registered representative at New England Securities (NES) during the time he ran his scheme, and “led at least some investors to believe that Wealth Resources was associated with NES,” according to the complaint.
Wegener promised to put more than 20 investors’ money into “publicly traded securities, publicly traded mutual funds, and other investment vehicles, such as certificate of deposits or private businesses,” the SEC says, but he simply deposited the money into Wealth Resources bank accounts.
“The most recent ‘account statements’ obtained by the Commission reflect that 46 customers held a total of $10.5 million in investments through Wealth Resources as of April 1, 2010,” the complaint states. But the SEC says Wegener did not make any of the investments he reported.
Wegener sent more than $962,200 to his own bank accounts, at least $65,500 to his now ex-wife Kristin Wegener, and more than $673,100 to companies in which he has an interest, the SEC says.
“In order to prolong and perpetuate his scheme, Wegener made Ponzi-like payments of at least $1.1 million to certain investors who requested the return of all or part of their investments,” the SEC adds. It says that Wegener also transferred property to his wife during divorce proceedings, which may have been bought and maintained with investors’ money.
Wegener owned and operated Wealth Resources but never registered it with the SEC, according to the complaint. The SEC also sued WU Ventures, Secura Technology, and Trailblazer Learning, also owned or part-owned by Wegener. It seeks disgorgement, penalties and an injunction.