International Law

Min and Dime Ponzi Alleged

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From the SEC's Press Release on the Min and Dime Ponzi scheme.

The Securities and Exchange Commission today charged John H. Min of Tacoma, Wash., and his company Dime Financial Group LLC for raising more than $6 million in a fraudulent investment scheme that targeted churches, church members and senior citizens.

The SEC alleges that Min misled some investors into believing their money would support Third World charitable causes while in fact spending the funds on his own lavish lifestyle and on failed high-risk investments.

According to the SEC's complaint, Min associated himself with a tight-knit religious and philanthropic community in the Pacific Northwest, creating a not-for-profit entity to attract charitable investors who believed that their investments would support certain Third Word aid groups, such as a charity supporting Bolivian widows and orphans.

Min lured other investors by telling them that his trading expertise allowed him to make annual returns as high as 800 percent, and by touting Dime as a safe, low-risk investment for retirees' savings.

The SEC alleges that Min and Dime deceived more than 60 investors since 2005 into buying interests in Dime's purportedly prosperous investment program.

According to the SEC's complaint, filed in federal court in Seattle, Min told investors that he would use their money to trade in the foreign currency exchange (Forex) market.

The SEC alleges that Min instead misappropriated about $1.4 million of investors' funds to finance a lavish lifestyle that included a $70,000 Mercedes, expensive vacations, and private school tuition for his children.

Min also illicitly used investor funds to bankroll a failed film venture about evangelical churches, and to pay expenses relating to the operation of the fraud.

When Min did actually invest the funds, his trading record was abysmal. He lost more than $5 million on the Forex market, according to the SEC's complaint.

To conceal the fraud, Min sent investors false account statements reporting high returns, while he was actually depleting the entire investment pool through theft and trading losses.

Min lied about his and Dime's credentials by, among other things, falsely telling investors that Dime was supervised by an "Advisory Board" populated by accomplished individuals.

Full post as published by Misleading Advertising Law on March 31, 2009 (boomark / email).