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SEC Charges Operators of Fraud Based in Upstate New York

Washington D.C., July 30, 2015

The Securities and Exchange Commission today charged two men and eight companies with defrauding investors, many of them upstate New York residents, who purchased the companies’ securities and so-called “charitable gift annuities.” 

According to the SEC’s complaint filed in U.S. district court in Syracuse, New York, the alleged scheme raised at least $8 million from 125 or more investors in shares and promissory notes issued by the companies over more than seven years, starting in 2007. 

The complaint names James P. Griffin, the founder and CEO of 54Freedom Inc., both of Cazenovia, New York, and James Wolle, 54Freedom’s Chief Financial Officer and Treasurer.  Six other Cazenovia, New York-based firms, 54Freedom Securities Inc., MoneyIns Inc., 54Freedom Foundation Inc., 5 Ledyard Ave. LLC, 5 Ledyard Corp., IICNet LLC, and Miami-based 54FreedomTele Inc. also were named in the complaint. 

In a parallel criminal action, the U.S. Attorney’s Office for the Northern District of New York announced on July 24 that it had arrested Griffin on charges of fraud and money laundering related to the “charitable gift annuities.”

The SEC’s complaint alleges that Griffin and Wolle repeatedly misled prospective investors regarding the companies’ prospects, for instance, falsely claiming that they had an exclusive relationship with Lloyd’s of London and that they would publish a soccer book affiliated with the “Chicken Soup for the Soul” series.  

In addition, Griffin is alleged to have sold purported “charitable gift annuities” that he falsely claimed were backed by reputable insurance companies and to have diverted at least $1.2 million of investor funds to pay for corporate and personal expenses, including a boat and trips he and his wife took to Hawaii and New Zealand.

“We allege that Griffin and Wolle picked numbers out of thin air and even guaranteed projections to purchasers of the securities while taking undisclosed sums for themselves,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.

The SEC’s complaint charges Griffin, Wolle and the eight companies with violations of the antifraud and registration provisions of the securities laws and names Griffin’s wife, Chary Griffin, as a relief defendant for the purpose of recovering allegedly misappropriated investor funds.

The SEC’s investigation has been conducted by Celeste Chase and Olivia Zach.  The SEC’s litigation will be led by Jack Kaufman and Christopher Dunnigan.


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