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SEC Stops Boondoggle in Chicagoland

CHICAGO (CN) - The SEC has frozen the accounts of a private fund manager in Gilberts, Ill., northwest of Chicago, claiming Scott M. Ross skimmed at least $2 million from the $10 million he raised from 300 investors.

Ross had been fraudulently soliciting investments since 2007 in three "purported private investment funds that he managed," the SEC said in a news release.

He raised $2 million for the Elucido Fund, which supposedly invested in life settlement contracts; $2 million to buy stock in "Moondoggies Technologies;" and $6 million to $7 million for the Maize Fund, which supposedly did foreign exchange trades.

"On January 29, 2009, Ross admitted to the staff of the SEC's Chicago Regional Office that he had misappropriated approximately $2 million from at least one of those investment funds. In addition, Ross admitted that he took an undetermined amount in undisclosed commissions from another of those investment funds. Among other things, Ross also admitted to using money from one fund to pay returns to investors in another fund," according to the federal complaint.

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