Securities and Exchange Commission
Litigation Release No. 17885 / December 9, 2002
SEC Sues Miami-Based A. B. Financing and Investments, Inc. and Anthony Blissett for $31 Million Affinity Fraud Aimed at African Americans
Securities and Exchange Commission v. A. B. Financing and Investments, Inc. and Anthony Blissett, Case No. 02-23487-CIV-UNGARO-BENAGES (S.D. Fla., filed December 6, 2002)
The Securities and Exchange Commission (SEC) announced that on December 6, 2002, it filed an emergency action to halt an affinity fraud conducted by Miami-based A. B. Financing and Investments, Inc. ("A. B. Financing") and its principal, Anthony Blissett ("Blissett"), that has raised at least $31 million. According to the SEC's Complaint, the affinity fraud targeted African Americans, and has been ongoing since at least 1998. Also on December 6, 2002, Judge Ursula Ungaro-Benages, U.S. District Judge for the Southern District of Florida, issued various emergency orders against the defendants, including temporary restraining orders, asset freezes, and orders that they repatriate investor assets that have been sent overseas.
The SEC's Complaint alleges that A. B. Financing and Blissett falsely guarantee to investors and potential investors that A. B. Financing will generate a 30%, risk- and tax-free annual return on their investment. According to the SEC's Complaint, Blissett entices potential investors to invest with A. B. Finance by claiming that he can offer them an opportunity to make the type of investments, and corresponding profits, that have thus far been offered only to "whites" or select African Americans. The defendants also falsely represent that A. B. Financing has over $36 million in assets, when, according to the SEC's Complaint, its financials and its federal income tax return for 2001 actually reflect a negative net worth of over $27 million.
The SEC's complaint also alleges that, although A. B. Financing and Blissett claim to generate returns for investors by making investments in, among other things, real property and securities that are insured, in reality the speculative stock and real estate purchases that A. B. Financing and Blissett have made with investor proceeds have lost millions of dollars and do not provide safe or guaranteed returns. According to the SEC's Complaint, investor losses from A. B. Financing's securities trading alone were nearly $2.5 million as of 2001. Moreover, the real estate assets purchased using investor funds are illiquid and most are encumbered by mortgages. As a result, the SEC alleges, the defendants have conducted a typical Ponzi scheme by using proceeds that are coming in from new investors to make interest payments to existing investors.
The SEC's complaint charges A. B. Financing and Blissett with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Those sections and rules prohibit certain transactions in securities not registered with the Commission, prohibit fraud in the offer and sale, and in connection with the purchase and sale, of securities, and prohibit investment advisers from defrauding clients. The complaint also name Blissco Properties, Inc., Jamrock Market Place, Inc. and Carribean Cultural Art & Exhibition Centre, Inc. as relief defendants three companies controlled by Blissett that have received investor funds.
Investors are advised to read the SEC's "Affinity Fraud" Investor Alert, which provides tips on how to avoid being a victim in an affinity fraud. This and other investor alerts can be found on the SEC's web site, at www.sec.gov.
The SEC also thanks the State of Florida, Department of Banking and Finance, Office of the Comptroller for its assistance in the investigation of this matter.