Small business owners and seniors in Florida have been the victim of a tropical themed Ponzi scheme that is now under investigation by the US Securities and Exchange Commission.
The SEC announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze against two people and the two companies they control.
The SEC alleges Neil Burkholz and Frank Bianco participated in a US$6 million Ponzi scheme that defrauded at least 55 investors, many of whom are the elderly or small business owners.
The two are accused of falsely representing themselves as advisers and fiduciaries and knowingly misappropriating investor assets by diverting them to pay other investors and transferring the funds to themselves.
The defendants, who operated the "Amazing Profits Group", said the companies, called Palm Management and Shore Management, managed the "Palm" and "Shore" investment funds.
The SEC said both Palm Management and Shore Management are not registered with the Commission in any capacity.
The SEC alleges Burkholz and Bianco invested less than half of the funds they solicited and the investments they did make have resulted in a near-total loss.
According to the SEC's complaint, the defendants sent false reports to investors to conceal their fraudulent conduct and give the investors the false impression they were generating positive returns.
Court documents filed by the SEC claim investors lost between US$25,000 and US$1.1 million since 2014.
The SEC said they have taken the emergency action to prohibit the men from soliciting new investors, freeze their assets and order them to provide a sworn accounting of their assets.
"The SEC's emergency action is intended to protect prospective investors from future harm by halting what we allege is a brazen ongoing fraud that targeted many senior citizens and small business owners," said Carolyn Welshhans, associate director in the SEC's Division of Enforcement.