The Securities and Exchange Commission (SEC) obtained a temporary restraining order and an asset freeze to stop an alleged Ponzi scheme and misappropriation of investor funds by Jonathan P. Maroney through several entities he controlled including Harbor City Capital.
The US watchdog filed a complaint against Maroney and his companies allegedly claiming they raised $17.1m from over 100 people in a series of fraudulent securities offerings. The SEC alleged Maroney told investors that offering profits would be used to finance Maroney’s online “customer lead generation campaigns” and promised investors annual returns ranging between 10% to 60% from the resale of those leads to other businesses.
However, hardly any investor money went to the lead generation business. Maroney misappropriated at least $4.48m in investor funds by spending it on himself, “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 regulator claimed.
SEC’s complaint further revealed that Maroney misused investor money by making payments to other entities unrelated to the supposed purpose of the offerings and that he fraudulently used investor funds to make monthly interest payments and other payouts to investors in a classic Ponzi scheme manner.
Commenting on the case, director of the SEC’s Miami regional office Eric I. Bustillo 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 sceptical of any investment that promises extraordinarily high rates of return.”
The regulator’s complaint has asked for emergency relief, which was granted by the court, preliminary and permanent injunctions, disgorgement, prejudgment interest and a civil penalty from each of the defendants.
SEC has also named Tonya Maroney, Maroney’s wife and Celtic Enterprises LLC, another Maroney-controlled entity, as relief defendants for receiving profits from the alleged fraud. The Court has scheduled a hearing on 29 April to determine if a preliminary injunction should be entered and whether the asset freeze should remain in force for the duration of the litigation.
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