Pinnacle Development Partners LLC and Gene A. O’Neal
On October 11, 2006, the SEC
obtained a preliminary injunction, asset freeze and other relief against
Pinnacle Development Partners LLC and its founder, Gene O’Neal, in connection
with a Ponzi scheme. According to the complaint,
the defendants fraudulently raised at least $30 million from more than 2,000
investors nationwide and in two foreign countries. The SEC alleged that the
defendants promised investors as a result of purchasing foreclosed real estate,
making minor repairs and then selling the property, they would receive a 25%
return in 45 days (later changed to 60 days) and, after 90 days, a second 25%
return and return of their investment. According to the complaint, however, the
defendants did not use investors funds for this purpose, but actually used
funds from later investors to pay returns to earlier investors. For more
information about the SEC’s action, you can read Litigation Release No. 19864 (Oct.
The Court also appointed S. Gregory
Hays as Receiver. For the latest information about the Receivership, please visit the Receiver’s website.