SEC Charges Additional Defendant in Multimillion Dollar Ponzi and Pyramid Scheme
Litigation Release No. 24644 / October 15, 2019
Securities and Exchange Commission v. Eric J. "EJ" Dalius et al., No. 2:18-cv-08497 (C.D. Ca. filed October 3, 2018)
On October 3, 2019, the Securities and Exchange Commission filed an amended complaint adding Ryan M. Evans, a California resident, as a defendant to its litigated action involving a multimillion dollar Ponzi and pyramid scheme called Saivian. The SEC's amended complaint alleges that Evans played a significant role in promoting the scheme while serving as Saivian's Director of Operations and Vice President of Marketing.
The SEC's initial complaint in this matter, filed in October 2018, alleged that convicted felon Eric J. "EJ" Dalius and the companies he controlled under the umbrella name "Saivian" engaged in a scheme to defraud when they sold securities that entitled investors to receive 20% cash back on their shopping purchases in exchange for paying a fee of $125 every 28 days, and submission of receipts. In its amended complaint, the SEC charges Evans with taking actions and making material misstatements in furtherance of the scheme. The amended complaint alleges that defendants Dalius, Evans, and the Saivian companies falsely claimed that Saivian funded its cash back payments to investors by selling receipt data submitted by its members. Instead, the defendants operated a Ponzi scheme in which they paid returns to investors from the funds of later investors, rather than through legitimate business activity. The amended complaint also alleges that the defendants engaged in an illegal pyramid scheme when they promised a daily residual income stream for affiliates who sold Saivian memberships to downline recruits. The SEC also alleges Dalius concealed his control of the Saivian scheme and failed to disclose his prior criminal conviction in connection with an earlier multi-level marketing fraud.
The SEC's amended complaint, filed in federal court in California, charges Dalius, Evans, Professional Realty Enterprises, Inc., Saivian LLC, Savings Network App LLC, Saving Network App Limited, Saivian International Limited, Saivian INT Limited, and Realty Share Network, LLC with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the registration provisions of Sections 5(a) and (c) of the Securities Act.
The SEC encourages investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov. Investors can also use the SALI feature to find information about certain people who have had judgments or orders issued against them in SEC court actions or administrative proceedings.
The SEC's continuing litigation and investigation is being conducted by Kenneth Donnelly, Derek Bentsen, Geoffrey Gettinger, Michael Flanagan, and Ivonia Slade. The SEC appreciates the assistance of the Hong Kong Securities and Futures Commission and the United Kingdom Financial Conduct Authority.