International Law

Billion Coupons Ponzi

From SEC Press Release on the Cooper Ponzi Scheme.

On February 18, 2009, the Securities and Exchange Commission obtained a court order halting an alleged $4 million Ponzi scheme perpetrated by Hawaii-based Billion Coupons, Inc. ("BCI") and its CEO Marvin R. Cooper.

The Complaint alleges that BCI and Cooper raised $4.4 million from 125 investors since at least September 2007 and specifically targeted members of the Deaf community in the United States and Japan.

The Complaint, filed in federal court in Honolulu, Hawaii, alleges that BCI and Cooper represented to the investors that their funds would be invested in the foreign exchange ("Forex") markets, that investors would receive returns of up to 25% compounded monthly from such trading, and that their investments were safe.

According to the Complaint, BCI and Cooper actually used only a net $800,000 (cash deposits minus cash withdrawals) of investor funds for Forex trading, and they lost more than $750,000 from their Forex trading.

The Complaint further alleges that BCI and Cooper failed to generate sufficient funds from their Forex trading to pay the promised returns and operated as a Ponzi scheme by paying returns to existing investors from funds contributed by new investors.

The Complaint also alleges that Cooper misappropriated at least $1.4 million in investor funds to pay for a new home and other personal expenses.

Full post as published by Misleading Advertising Law on February 21, 2009 (boomark / email).