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Tuesday, December 30, 2008

SEC Uncovers Alleged $23M Ponzi Scheme

By Lauren Covello

FOXBusiness

The Securities and Exchange Commission has moved to halt an alleged Ponzi scheme and affinity fraud that reeled in more than $23 million from thousands of Haitian-Americans across the country.

The SEC has obtained an emergency court order to freeze operations at Creative Capital Consortium LLC and A Creative Capital Concept$, LLC -- both run by principal George L. Theodule under the collective name Creative Capital.

The SEC claims investors were encouraged to form investment clubs to channel funds to Theodule and Creative Capital and were promised a 100% return on their investment within 90 days. Investors were also told trading profits were being used to fund new business endeavors supporting the Haitian community in the U.S., Haiti and Sierra Leone, according to the SEC filing. As a result, thousands of Haitian-Americans are believed to have taken part.

The SEC claims Theodule lost at least $18 million over the past year trading stocks and options and pocketed at least $3.8 million for himself and his family.

The purported scheme, the discovery of which comes on the heels of Bernard Madoff's alleged $50 billion Ponzi scheme, is believed to have been in place as early as November 2007.

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