U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23397 / October 30, 2015
Securities and Exchange Commission v. William M. Apostelos, et al., Civil Action No. 1:15-cv-00699 (October 29, 2015) (S.D. Ohio)
The Securities and Exchange Commission today announced an enforcement action against William M. Apostelos ("Apostelos") and his companies WMA Enterprises, LLC ("WMA"), Midwest Green Resources, LLC ("Midwest Green"), and OVO Wealth Management, LLC ("OVO"), alleging that they conducted a fraudulent investment scheme.
In its complaint, filed on October 29 in federal court in the Southern District of Ohio, the SEC alleges that Apostelos, WMA, Midwest Green, and OVO raised at least $66.7 million from approximately 350 investors since January 2010. The SEC alleges that, throughout the scheme, Apostelos knowingly made multiple misrepresentations to recruit prospective investors, including clients of OVO, a state-registered investment adviser. Apostelos told certain investors that their investment funds would be pooled with funds from other investors and invested in stock, precious metals, real estate, or used to make short-term loans at high interest rates to small businesses and farmers, with returns being generated by the underlying investments. He told other investors that he would place their funds in a pooled brokerage account and invest them in publicly traded stocks, bonds, and options.
The SEC alleges that, in reality, Apostelos funneled nearly all the investor funds to WMA's bank accounts and used them to make Ponzi-like payments to earlier investors and promoters; to finance other businesses he and his wife owned; and to pay for personal expenditures, including gambling.
The SEC's complaint charges that WMA and Midwest Green violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (the "Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder. It charges that OVO violated Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act; Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 ("Advisers Act"). It charges that Apostelos violated Sections 5(a), 5(c), and 17(a) of the Securities Act; Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder; and Sections 206(1), 206(2), and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. Additionally, the SEC charges that Apostelos aided and abetted and is liable as a control person for the violations of WMA and Midwest Green.
The SEC's complaint further alleges that Apostelos's wife, Connie Apostelos, and three businesses that she controls, Apostelos Enterprises, Inc., Coleman Capital, Inc., and Silver Bridle Racing, LLC, benefited from the fraudulent scheme by receiving at least $7 million in ill-gotten gains to which they have no legitimate claim and seeks disgorgement of those funds.
The SEC's investigation was conducted by Meredith J. Laval and Luz M. Aguilar and supervised by Amy S. Cotter of the Chicago Regional Office. The litigation will be led by John E. Birkenheier.