HONOLULU (CN) - The SEC seeks an emergency injunction to stop what it calls "an ongoing $68 million Ponzi scheme" run by Millennium Bank and five people who control it. It claims that defendants William Wise, Kristi Hoegel and others hoodwinked 375 investors by selling them "self-styled 'certificates of deposit'" that promised returns "up to 321 percent higher than legitimate bank-issued CDs."
Wise, 58, of Raleigh, N.C., and the Caribbean, has been running Millennium for 8 years, the SEC says. It claims the Ponzi scheme was "orchestrated by Wise and Kristi Hoegel and executed through the companies they control."
Also sued are the United Trust of Switzerland, UT of S LLC, Millennium Financial Group, Kristi Hoegel's mother Jacqueline Hoegel, Millennium Bank vice president Phillippe Angeloni, managing director Brijesh Chopra, and Wise's dbas: Sterling Administration, Sterling Investment Services and Millennium Aviation.
The SEC claims the defendants marketed Millennium Bank as "one of the most successful private banks in the Caribbean" and "'the benefactor of Swiss banking ... as well as the vast global investment network that United Trust of Switzerland S.A. has built over the last 75 years.' These assurances are false. Contrary to these representations, investors' funds are not safe and secure, because neither Millennium Bank nor UT of S, LLC actually invested any of the money it received from investors. Moreover, United Trust of Switzerland S.A. is not a bank or securities dealer. Instead, investor funds were diverted to the defendants and used for a variety of illegitimate purposes."
The SEC says the defendants funneled investors' checks into a single account at Washington Mutual JP Morgan Chase, where they were commingled, and withdrawn for sprees on wine, plane rides, fancy cars and other high life, six figures at a time.
The allocation of the loot begins on page 12 of the 17-page complaint. It claims $14 million was simply swiped, $2.8 million paid credit card expenses, and $90,000 went for wine.
"Millennium's website is published in English, as well as thirteen other languages," the SEC says, and uses "Haute Living" banner ads to attract investors.
The SEC claims the defendants use "lulling" tactics to quell suspicions, using the flashy online zine wealthcollection.com, on which the defendants stated, "To most people, these rates appear to be high, leading many to suspect that something is not right. That is a normal human reaction. But nothing could be farther from the truth."
It's not the first time around for Wise, the SEC says. In 2003 the Pennsylvania Securities Commission "ordered Wise to comply with state securities laws in connection with the sale of high return 'deposit agreements' offered by a Grenada bank.
Kristi Hoegel aka Kristi Christopher aka Bessy Lu, 34, lives in Napa, Calif. In 2006, she was ordered to cease and desist selling unregistered securities in Minnesota.
Jacqueline Hoegel, 52, of American Canyon, Calif., is Kristi's mother and Daryl Hoegel's wife; Daryl Hoegel is named as a relief defendant, as is Ryan Hoegel, 29, of Lincoln, Calif., who is Kristi Hoegel's brother "and does data entry for the defendants' business."
The place of residence of Chopra, 41, is unknown; Angeloni, 63, lives in Raleigh, N.C.
The SEC seeks disgorgement of all ill-gotten gains and property purchased, and civil penalties.
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