MIAMI (CN) - Trade-LLC and its two managing members suckered investors in a $28 million Ponzi scheme, the SEC claims. Philip W. Milton and William Center persuaded three private investment clubs to hand over the money with promises of 8 percent monthly returns, according to the settled federal complaint.
The men claimed to have sophisticated trading software that earned them 100 percent annual returns, but actually lost millions, the SEC says. "They then blatantly lied to the clubs about the returns that were being achieved and hid the clubs' losses by running a Ponzi scheme," the SEC's regional director said in a statement.
Milton must disgorge $2.4 million in ill-gotten gains and pay a $130,000 fine.
The settled complaint says the men used their victims' money to pay themselves salaries of more than $2 million (Milton) and more than $1 million (Center), spent more than $1.3 million in business and other expenses, and transferred $4.8 million to three other Florida companies they controlled.
Milton, 62, lives in Palm Beach Gardens; Center, 64, in Richmond, Va.
Milton also agreed to an SEC order not to do it again.
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