U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22832 / October 3, 2013
Securities and Exchange Commission v. Edwin Yoshihiro Fujinaga, MRI International, Inc., and CSA Service Center, LLC, Civil Action No. 2:13-cv-01658-JCM-CWH (D. Nev.)
SEC Obtains Asset Freeze and Other Emergency Relief in Ponzi Scheme Targeting Investors in Japan
The Securities and Exchange Commission announced an emergency action to freeze the assets of a Las Vegas resident and his companies in connection with a Ponzi scheme that defrauded thousands of investors living primarily in Japan.
The SEC alleges that Edwin Yoshihiro Fujinaga and his company MRI International, Inc. raised more than $800 million from investors who were told that their money would be used to buy medical accounts receivable (MARs) that medical providers in the United States held against insurance companies. Fujinaga and MRI represented that the company used investors' money to buy MARs from medical providers at a discount and tried to recover the full value of the MARs from the insurance companies. Fujinaga and MRI represented that they used investor money solely and exclusively to buy MARs.
According to the SEC's complaint, which was filed under seal on September 11, 2013 and unsealed last week in the U.S. District Court for the District of Nevada, MRI was a fraudulent Ponzi scheme designed to misappropriate money from investors. Fujinaga and MRI used investor money to pay the principal and interest due to earlier investors, for the expenses of MRI and other businesses owned by Fujinaga, and to buy luxury cars and pay Fujinaga's credit card bills, alimony, and child support.
The Honorable James C. Mahan for the U.S. District Court for the District of Nevada granted the SEC's request for a temporary restraining order, asset freeze and other emergency relief against MRI, Fujinaga, and CSA Service Center LLC, as a relief defendant.
The Commission's complaint alleges that Fujinaga and MRI violated Sections 17(a)(1), (2), and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and seeks disgorgement of ill-gotten gains from Fujinaga, MRI, and relief defendant CSA, as well as financial penalties, permanent injunctions and other emergency relief.
The SEC's investigation, which is continuing, has been conducted by Danette R. Edwards and Thomas C. Swiers and supervised by Gregory G. Faragasso. The JFSA's Yuichiro Enomoto, who was seconded to the SEC, provided valuable assistance. The SEC's litigation is being led by Richard E. Simpson and Robert I. Dodge. The SEC appreciates the assistance of the JFSA, SESC, and the State of Nevada Division of Mortgage Lending.