RENO, Nev. (CN) — The SEC claims in court that a Nevada attorney ran a $15.8 million offshore Ponzi scheme and tried to buy himself citizenship in St. Kitts, to duck prosecution in the United States.
The SEC sued David B. Kaplan and his three companies: Synchronized Organizational Solutions, Synchronized Organizational Solutions International, and Manna International Enterprises.
The complaint was filed under seal on May 19. It claims that Since May 1, 2012, Kaplan has taken $15.8 million from at least 26 investors for an "investment program" that supposedly pooled money in an offshore account for international trading.
Though he did send $10.1 million to "certain offshore entities," Kaplan sent $5.6 million to accounts he controlled, "used at least $2.3 million for his personal benefit," and doled out $1.8 million as "Ponzi-like payments," according to the SEC complaint.
Kaplan, 49, of Glenwood, Nev., has been a licensed attorney in California since 1991, and received securities licenses in 2005-2006 when he worked for (nonparty) Merrill, Lynch, Pierce, Fenner & Smith.
The SEC says Kaplan continued making monthly Ponzi payments until September 2015, when he told investors a problem had caused the investment account to be frozen, along with its cash balance.
It claims he also sent $1.1 million to his wife, Lisa Kaplan, The Walking Water Foundation and Manna Investments. Another $360,000 went to an "allegedly fraudulent scheme" the federal government is investigating in Ohio, and another $385,000 to St. Kitts and Nevis in the West Indies, according to the complaint.
Kaplan paid nearly $80,000 of the $385,000 he sent to St. Kitts and Nevis to get citizenship papers for himself and his wife through the island nation's Citizenship-by-Investment program, the SEC says.
It seeks disgorgement of ill-gotten gains, an injunction and penalties for securities fraud.
Named as relief defendants are Lisa M. Kaplan, The Walking Water Foundation, and Manna Investments.
St. Kitts news reported that the government revoked the Kaplans' passports Monday, effective immediately, upon learning of the SEC complaint.No contact information could be found for Kaplan or the three entities he controls.
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