Funds Management: SEC charges radio host with fraud
Barbra (sic) Alexander ran a business called APS Funding. She also presented a radio programme called "MoneyDots") which was syndicated across the USA and overseas. But she didn't keep her two lives separate.
The SEC alleges that Alexander "used her status as host of an internationally-syndicated radior show for entrepreneurs to lure investors who thought [that] their money would be used to fund short term loans secured by real-estate."
But, says the SEC announcing that it is suing Alexander and two others "Alexander along with the firm's secretary/chief financial officer Beth Piņa of Fairfield, Idaho, and vice president Michael E. Swanson of Seaside, Calif., instead stole investor money to pay themselves USD1.2 million and finance MoneyDots and other unrelated businesses unbeknownst to investors. Alexander even used USD200,000 of investor funds to remodel her kitchen."
According to the SEC's complaint filed in federal district court in San Jose, Alexander, Piņa and Swanson raised nearly USD7 million from 50 investors for two investment funds managed by APS Funding. They claimed that the funds would make short-term secured loans to homeowners and yield 12 percent annual returns to investors. Contrary to what investors were told, USD1.2 million of their money instead went directly to Alexander, Piņa, and Swanson for personal use, and USD1.3 million in investor funds was used to finance other businesses owned by Alexander and APS Funding, including MoneyDots.
The SEC further alleges that Alexander, Piņa, and Swanson furthered the scheme by sending monthly account statements to investors reflecting fictitious profits and, in classic Ponzi scheme fashion, paying out purported returns that actually came from new investors.
The SEC's complaint alleges Alexander, Piņa, Swanson, and APS Funding breached the antifraud provisions of the federal securities laws and also alleges that Alexander, Swanson, and APS Funding made unregistered sales of securities. The action seeks injunctive relief, surrender of ill-gotten gains and monetary penalties.
The SEC's action is civil not criminal procedings
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