U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20932 / March 6, 2009
Securities and Exchange Commission v. CRE Capital Corporation and James G. Ossie, Civil Action No. 1:09-CV-0114-RWS (N.D. Ga.)
SEC FILES APPLICATION FOR ORDER TO SHOW CAUSE AGAINST JAMES G. OSSIE
On February 20, 2009, the Securities and Exchange Commission ("Commission") filed an Application for Order to Show Cause why Defendant James G. Ossie ("Ossie") should not be held in civil contempt for his violation of the Court's January 15, 2009 order freezing assets.
The Commission's application for an order to show cause alleged that, after the Court entered an Order freezing Ossie's assets on January 15, 2009 and after Ossie was served with the Order, Ossie violated the terms of the Order by selling a BMW 750 to Carmax, Inc. for $51,000, depositing the check from Carmax into a brokerage account, and then instructing the brokerage firm to transfer $45,000 of the money into a bank account controlled by Ossie's wife.
In the pending litigation, the Commission alleged that, since at least early 2008, CRE Capital Corporation ("CRE") and Ossie have raised at least $25 million from over 120 investors. As alleged in the Complaint, CRE offers "30 Day Currency Trading Contracts," which promise a guaranteed ten percent (10%) return (the "ROI") in thirty days. The Complaint also alleged that CRE and Ossie claim that they generate profits sufficient to pay these guaranteed returns by trading United States and Japanese currency contracts as the exchange rate fluctuates. Further, the Complaint alleged that CRE and Ossie told investors that the program involves very little risk because CRE has established a large, defensive reserve fund from which to pay back the 10% ROI, plus redeemed principal. In fact, as alleged in the Complaint, CRE does not generate sufficient returns from currency trading to pay the promised returns. The Complaint alleged that the defendants claim CRE and its program were audited by an outside accounting firm which concluded that the investment program was not a Ponzi scheme. In fact, according to the Complaint, CRE operated as a Ponzi scheme by paying all returns to investors from funds contributed by new investors.
See also: LR 20853 (January 15, 2009).