U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20840 / December 30, 2008
Securities and Exchange Commission v. Creative Capital Consortium, LLC, et. al., Case No. 08-81565-CIV-Hurley/Hopkins (S.D. Fla., filed December 29, 2008)
SEC HALTS $23 MILLION PONZI SCHEME AND AFFINITY FRAUD TARGETING HAITIAN-AMERICAN INVESTORS
The United States Securities and Exchange Commission announced that on December 29, 2008, it filed an emergency action to halt a Ponzi scheme and affinity fraud conducted by Creative Capital Consortium, LLC and A Creative Capital Concept$, LLC (collectively, Creative Capital), and its principal, George L. Theodule. According to the Commission's complaint, the defendants raised at least $23.4 million from thousands of investors in the Haitian-American community nationwide through a network of purported investment clubs Theodule directs investors to form. Also on December 29, 2008 Judge Donald M. Middlebrooks, U.S. District Judge for the Southern District of Florida, issued an order placing Creative Capital under the control of a receiver to safeguard assets, as well as other emergency orders, including temporary restraining orders and asset freezes.
The Commission's complaint alleges that starting in at least November 2007, Theodule, directly and through Creative Capital, raised at least $23.4 million from thousands of investors, mostly Haitian-Americans. As part of the scheme, the defendants direct investors to form investment clubs solely for the purpose of funneling funds to Theodule and Creative Capital. Theodule solicits investors for Creative Capital by guaranteeing a 100% return on their investment within 90 days based on his claimed successful trading of stocks and options. The defendants also solicit investors by claiming that Creative Capital's trading profits are used to fund new business ventures, some of which benefit the Haitian community in the United States and Haiti, and others in Sierra Leone. In truth, Theodule has lost at least $18 million trading stocks and options just over the last year. In addition, Creative Capital merely repaid earlier investors with monies collected from new investors in typical Ponzi scheme fashion. Finally, the Complaint alleges, Theodule has commingled investor funds with his personal funds and misappropriated at least $3.8 million for himself and his family.
The Commission's complaint further alleges:
In addition to the emergency relief obtained today, the Commission's complaint seeks disgorgement of the defendants' ill-gotten gains, civil penalties, and permanent injunctions barring future violations of the antifraud provisions of the federal securities laws.
Investors are advised to read the Commission's "Affinity Fraud" Investor Alert, which provides tips on how to avoid being a victim in an affinity fraud. This and other investor alerts can be found on the SEC's web site, at www.sec.gov/investor/pubs.shtml. The "Affinity Fraud" Investor Alert has also been translated into Creole and posted on the Commission's website.
The Commission acknowledges the assistance of the State of Florida's Office of Financial Regulation in connection with this matter.
The SEC's investigation is continuing.