Minnesota residents Jason Dodd Bullard and Angela Romero-Bullard raised millions from investors, mostly friends and family, and said it would be used to trade foreign currencies. Instead, the Securities and Exchange Commission claims that the two diverted the money to other uses and falsified account statements. In the classic Ponzi scheme fashion, they used new investors’ money to pay redemptions by earlier investors.
The two produced false account statements for over 14 years. Although the account statements showed good returns, in reality the two had suffered large losses. In October, the two sent an investor a statement showing a balance of over $1.4 million. Unfortunately, the two only had $30,000 in the trading accounts.
The two told some investors that they were not required to be registered with any government agency. They told other investors that they were registered. In response to one investor’s redemption request they told the investor that the withdrawal request had to be approved by regulators. FYI: redemption requests do not have to be approved by government financial regulators.
Instead of investing in foreign currencies, the SEC claims that the two diverted the cash to other businesses they owned, including a horse racing stable, a limousine service and a fitness studio.
Sources:
- SEC Complaint: https://www.sec.gov/litigation/complaints/2021/comp25194.pdf
- SEC Alleges Empire Racing Stables Used in Ponzi Scheme : https://www.bloodhorse.com/horse-racing/articles/252856/sec-alleges-empire-racing-stables-used-in-ponzi-scheme
- Shakopee couple ran $18M Ponzi scheme to fund horse racing: https://www.fox9.com/news/shakopee-couple-ran-18m-ponzi-scheme-to-fund-horse-racing-sec-says