U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21320 / December 2, 2009
Securities and Exchange Commission v. Shidaal Express, Inc. and Mohamud Abdi Ahmed, United States District Court for the Southern District of California, Case No. 09 CV 2610 JM (POR) (filed Nov. 19, 2009).
SEC OBTAINS PRELIMINARY INJUCNTION IN AFFINITY FRAUD CASE TARGETING THE SOMALI COMMUNITY
The Securities and Exchange Commission ("Commission") announced that it obtained a preliminary injunction in an affinity fraud case targeting investors in the Somali immigrant community. On November 30, 2009, the United States District Court for the Southern District of California entered a preliminary injunction against Mohamud A. Ahmed ("Ahmed"), age 45, of Spring Valley, Calif., who perpetrated the fraud through his company, Shidaal Express, Inc. ("Shidaal Express"), which operated in the San Diego area. The preliminary injunction enjoins Ahmed and Shidaal Express from violating the antifraud provisions of the federal securities laws and the Court granted additional relief sought by the Commission including orders freezing the assets of Ahmed and Shidaal Express, and appointing Thomas Hebrank as permanent receiver over Shidaal Express.
The Commission's complaint, filed November 19, alleged that Ahmed raised at least $3 million from more than 40 investors in the Somali community by promising guaranteed returns of 5% per month, or 60% annually, and promised investors they could get their money back anytime. The Commission alleged that although Ahmed initially paid investors monthly returns, the payments eventually stopped. The Commission charged Ahmed and Shidaal Express with committing securities fraud by making false and misleading statements to persuade people to invest.
In addition to the relief already obtained, the Commission's complaint seeks permanent injunctions, disgorgement, prejudgment interest, and financial penalties against Ahmed and Shidaal Express.
The Commission acknowledges the assistance of the California Department of Financial Institutions, the Federal Bureau of Investigation, and the U. S. Attorney's Office for the Southern District of California.
For further information, see Litigation Release No. 21310 (November 20, 2009).