U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25858 / September 27, 2023
Securities and Exchange Commission v. Pedram Abraham Mehrian, Strategic Legacy Investment Group, Inc. and SLIG High-Interest Liquid Savings Company, No.2:23-cv-08009 (CD. Cal. September 25, 2023)
SEC Charges Los Angeles Man and His Related Entities with Ponzi-Like Scheme
Today, the Securities and Exchange Commission charged Los Angeles resident Pedram Abraham Mehrian and two companies he controlled with conducting a multi-year Ponzi-like scheme and misleading investors who purchased more than $17.5 million in promissory notes.
According to the SEC's complaint, from at least January 2018 through October 2022, Mehrian used two entities he founded, Strategic Legacy Investment Group, Inc. and SLIG High-Interest Liquid Savings Company, to raise money from retail investors, including retirees, for the purported purpose of investing in real estate. Mehrian and his entities allegedly raised this money through the unregistered offer and sale of promissory notes, which they represented paid "guaranteed interest" above market interest rates offered by banks, often as high as 9%. Mehrian and his entities allegedly represented to investors the notes were "safe" and "secure" because they were "backed" and "collateralized" by Strategic Legacy's "portfolio of assets" and were "recession-proof." In reality, the complaint alleges, Mehrian and his entities treated investor funds as one pool of money, commingled investor funds, and diverted new investor funds to make Ponzi-like payments to existing investors totaling at least $4.2 million. The complaint alleges they made materially false and misleading statements to investors by failing to disclose that Strategic Legacy was not profitable, its assets did not generate enough revenue to pay promised returns, and investors did not have any collateralized interest in real estate. When Mehrian and his entities were unable to pay promised returns, they blamed the economic impact of the COVID-19 pandemic for their failure to pay, but they continued to send investors false account statements showing ever-growing account balances from interest payments that were never made.
The SEC's complaint, filed in U.S. District Court for the Central District of California, charges Mehrian and his entities with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks a conduct-based injunction and an officer and director bar against Mehrian, and injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.
The SEC's investigation was conducted by David Brown and Maria Rodriguez and was supervised by Ansu Banerjee and Rhoda Chang of the Los Angeles Regional Office. The litigation will be led by Daniel Lim.