SEC stops Jonathan Maroney’s $17.1 million Ponzi scheme in Florida
Mr. Maroney misappropriated at least $4.48 million in investor funds to enrich himself and his family, “including the purchase and maintenance of his waterfront home and a Mercedes Benz, and to pay for his extensive credit card bills and renovation-related expenses on the house”, the SEC claims.
The Securities and Exchange Commission has obtained a temporary restraining order and an asset freeze to stop an alleged Ponzi scheme perpetrated by Jonathan P. Maroney through several entities he controls in Florida, including Harbor City Capital Corp. where he was CEO.
Since May 2015, Mr. Maroney raised at least $17.1 million from more than 100 investors in a series of fraudulent securities offerings, the SEC alleges, adding that he told investors that offering proceeds would be used to finance online “customer lead generation campaigns” and produce annual returns ranging from 10% to 60% from the resale of those leads.
Instead, Mr. Maroney misappropriated at least $4.48 million in investor funds to enrich himself and his family, “including the purchase and maintenance of his waterfront home and a Mercedes Benz, and to pay for his extensive credit card bills and renovation-related expenses on the house”, the SEC claims.
As in a classic Ponzi scheme, he allegedly fraudulently used investor funds to make monthly interest payments and other payouts to investors.
Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said: “As alleged in our complaint, Maroney lured investors with promises of double-digit returns and false claims, while pocketing millions of investor dollars for himself. Investors should be skeptical of any investment that promises extraordinarily high rates of return.”
The complaint seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, and a civil penalty from each of the defendants, Mr. Maroney and each of the entities he controlled as well as the relief defendants, his wife Tonya Maroney and Celtic Enterprises LLC.
Gary Gensler was recently confirmed by the US Senate as the new Chairman of the SEC and has appointed Alex Oh as Director of the Division of Enforcement.
She was previously an Assistant U.S. Attorney in the Criminal Division of the U.S. Attorney’s Office for the Southern District of New York, where she was a member of the Securities & Commodities Fraud Task Force and the Major Crimes Unit.
“The Enforcement Division plays a critical role in protecting investors and maintaining fair, orderly, and efficient markets, essential components of the SEC’s mission. I am committed to working tirelessly to uncover and prosecute violations of the law, whether by businesses or their leaders so that we can keep American capital markets the strongest in the world”, she said.
Gary Gensler was nominated by President Joe Biden to lead the SEC. He has served as the 11th Chair at the CFTC during the tumultuous years post-2008.
Whilst at the CFTC he helped to transform the regulation of the OTC Swaps Market which had been at the epicenter of the global financial crisis. Though interestingly under the Clinton administration Mr. Gensler had helped to promote legislation that exempted OTC derivatives from regulation.
Mr. Gensler was very much seen as a reformer whilst at the CFTC and is credited with dragging the regulator into the modern world. During his term, the CFTC created 68 new rules, orders, and guidance and extended its regulatory reach to encompass not only exchange-traded derivatives but also the far larger OTC markets as well.
