The Securities and Exchange Commission today announced charges against John Brian McLane, Jr. of Kentucky and Paul Anthony Nash of Florida, for orchestrating a fraudulent pyramid scheme.

The SEC's complaint alleges that McLane and Nash defrauded over 700 investors by convincing them to invest in a fraudulent pyramid scheme they operated through their multi-level marketing company, Mindset 24 Global, LLC. According to the complaint, McLane and Nash raised more than $1 million from investors who purchased or sold packages of self-improvement materials in order to participate in Mindset 24's compensation plan, thereby earning commissions from profit-sharing pools and by recruiting new investors. As alleged in the complaint, Mindset 24 was not a legitimate business and was instead entirely dependent on existing investors recruiting new investors to fund the scheme. McLane and Nash also allegedly misappropriated over $50,000 in investor funds for themselves. As set forth in the complaint, the scheme inevitably collapsed, with the vast majority of investors losing money.

The SEC's complaint, filed in federal court in the Eastern District of Kentucky, charges McLane and Nash with violating the registration requirements of Sections 5(a) and 5(c) of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) and Rule 10b-5 thereunder of the Securities Exchange Act of 1934. The complaint seeks injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.

The SEC's investigation was conducted by Benjamin Perlman and supervised by Carolyn M. Welshhans and Nina B. Finston. The litigation will be led by Patrick Costello under the supervision of Jan M. Folena.

The SEC's Office of Investor Education and Advocacy has issued an Investor Alert to encourage investors to be aware of indications that a pyramid scheme may be posing as a multi-level marketing program.