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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23872 / July 3, 2017

Securities and Exchange Commission v. Cheryl L. Jones, No. 17-cv-11226-RGS (D. Mass. filed July 3, 2017)

SEC Charges Washington, D.C.-based Real Estate Agent and Sister of Convicted Ponzi Scheme Operator with Selling Unregistered Securities

The Securities and Exchange Commission today announced charges against Cheryl L. Jones, a Washington, D.C.-based real estate agent and the sister of convicted Ponzi scheme operator Mark A. Jones, for selling unregistered securities.

The SEC's complaint, filed in federal court in Boston, alleges that Cheryl Jones recruited many of her friends and associates to invest in unregistered promissory notes and personal guarantees that Mark Jones issued in connection with his Ponzi scheme. Mark Jones allegedly claimed that investors' money would be pooled to provide short-term "bridge loans" to Jamaican companies that had supposedly been approved for commercial bank loans but needed interim financing until their bank loan funding came through. Mark Jones allegedly told investors that their investments would earn interest of approximately 15% to 24% annually. Instead, as the complaint alleges, Mark Jones deposited the investors' money in his personal bank account and diverted almost all of it for personal expenses and to make "Ponzi" payments to other investors. The complaint also alleges that Mark Jones agreed to pay Cheryl Jones commissions of approximately 10% of the principal invested by new investors she referred to him. He also allegedly paid her a monthly "legal retainer" for services to him or the Bridge Fund. The complaint further alleges that between 2007 and 2015, Cheryl Jones was wrongfully enriched when she received payments from her brother totaling approximately $515,000 more than her approximately $876,000 investment in the Bridge Fund. Other investors lost substantial portions of their investments.

Cheryl Jones' brother, Mark Jones, pled guilty to criminal charges arising from his operation of the Ponzi scheme and was sentenced to 70 months imprisonment. The SEC charged Jones with securities fraud and obtained a default judgment.

The SEC's complaint charges Cheryl Jones with violating Section 5 of the Securities Act of 1933. The SEC seeks a permanent injunction against Cheryl Jones, disgorgement of her ill-gotten gains plus prejudgment interest, and a civil penalty.

The SEC's action is being handled by Frank Huntington, Xinyue Angela Lin, J. Lauchlan Wash, Sofia Hussain and Amy Gwiazda of the Boston Regional Office.

SEC Complaint

 

https://www.sec.gov/litigation/litreleases/2017/lr23872.htm


Modified: 07/03/2017