The Securities and Exchange Commission yesterday filed charges against Frantz Simeon, of Brooklyn, New York, and an entity he controls, First Black Enterprises, Inc., for operating a Ponzi-like scheme that defrauded predominately Haitian American New Yorkers.

According to the SEC's complaint, filed in the U.S. District Court for the Eastern District of New York, Simeon, through First Black Enterprises, fraudulently raised at least $335,000 from approximately 13 investors from at least April 2019 through at least February 2021, by falsely touting his purported business experience and track record. Simeon, who allegedly enticed investors by inviting them to First Black Enterprises's offices at the Empire State Building and showing them pictures of expensive houses, cars, and a yacht as evidence of his success as a businessman, falsely promised prospective and existing investors a risk-free, insured investment opportunity with guaranteed returns in the form of monthly "interest" payments of 10% of the principal invested, and falsely told prospective and existing investors that they could exit the investment at any time upon 30-days' notice for a full return of their principal. When investors asked Simeon for details about the investment strategy, Simeon allegedly refused to disclose such details because he did not want investors to mimic his strategy. In reality, as the complaint alleges, Simeon and First Black Enterprises conducted little-or-no actual business or investment activities with investor funds, and instead used funds from new investors to make monthly interest payments to them and earlier investors in Ponzi-like fashion, and misappropriated other investor funds for Simeon's personal benefit.

The SEC's complaint charges Simeon and First Black Enterprises with violations 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, and seeks permanent injunctive relief, disgorgement plus prejudgment interest, civil penalties, and an officer and director bar against Simeon.

In a parallel action, the U.S. Attorney's Office for the Eastern District of New York filed criminal charges against Simeon.

The SEC's Office of Investor Education and Advocacy has issued investor alerts on the recent rise of investment scam complaints and Ponzi scheme red flags. Additional information is available on Investor.gov.

The SEC's ongoing investigation is being conducted by Amanda Rios, Neil Hendelman, and Wendy B. Tepperman, and the litigation will be led by Pascale Guerrier and Ms. Rios. The case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York and the United States Postal Inspection Service.