SEC Says Ponzi Was a Family Affair

     WASHINGTON (CN) – A North Bethesda man defrauded investors in a $27 million Ponzi scam from which he drained $5 million for himself and his cronies, the SEC says. It sued Garfield Taylor, his two companies, and five other people, including his brother, a nephew, and the brother’s brother-in-law.
     Taylor ran Garfield Taylor Inc. and the Gibraltar Asset Management Group out of the same address on Northwest Wisconsin Avenue in Washington, D.C.
     “Garfield Taylor and the others jointly prepared and finalized a Gibraltar PowerPoint presentation for prospective investors that was riddled with false and misleading statements,” the SEC said in a statement accompanying its lawsuit. “They misrepresented the nature of the company’s options trading strategy, the anticipated rate of return, the protections offered by its outside accountant, and the overall level of risk involved in an investment with Gibraltar. They pitched the PowerPoint presentation to potential institutional investors and charitable organizations, including a Washington D.C.-based children’s charity and a Baptist church in Maryland. Garfield Taylor went so far as to provide the Baptist church with a fake ‘letter of recommendation’ from Charles Schwab as he pitched the investment opportunity.”
     Also sued were Maurice G. Taylor of Bowie, Md., Garfield’s brother, who was chief investment officer at Gibraltar and a trader for Garfield Taylor Inc.; Randolph M. Taylor of Washington, D.C., Garfield’s nephew and a vice president at Gibraltar; Benjamin C. Dalley of Washington, D.C., a childhood friend and business partner of Randolph Taylor and also a vice president at Gibraltar; Jeffrey A. King of Upper Marlboro, Md., whose sister is married to Maurice Taylor, and who was the president of Gibraltar, and William B. Mitchell of Middle River, Md., another vice president, at both companies.
     To keep the money rolling in, Garfield paid commissions to cronies who brought in new suckers, based on the amount of money they snared, the SEC says.
     The agency estimates the Ponzi scam took 130 victims for more than $27 million from 2005 to 2010. It collapsed, as Ponzi schemes will, in the autumn of 2010 when investment losses and Ponzi payments exhausted the honey pot, according to the SEC.
     Garfield Taylor is accused of spending at least $73,000 on his children’s private school.

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