When he finally laid down the chalk and stepped down from his teaching post at the Simi Valley Unified School District, Eric Smith (not his real namehe has asked to remain anonymous) looked forward to a serene and comfortable retirement. In the lawsuit he just filed, the retiree claims his stock broker, David Gin, of Camarillo, destroyed this dream.
The complaint alleges that in November, 2003, Gin arranged for the retired schoolteacher to take out a $275,000 home equity loan on his familys Thousand Oaks home and invest in Resort Holdings International (RHI). Gin allegedly told the schoolteacher that RHI guaranteed investors safety and a high rate of return. In fact, RHI was a classic Ponzi scheme, according to the investors lawyers. The scheme collapsed in April 2005, taking hundreds of senior investors money with it, and now the 80-year old retired schoolteacher is scrambling to make the monthly payments on his home equity loan, states the complaint.
The schoolteacher has hired Cleveland-based law firm Chapman & Associates to recover the money he says were lost as a result of Gins bad advice, and has filed a lawsuit to recover his losses. Chapmans investigation revealed that Kellys agents marketed the fraudulent scheme primarily to senior citizens.
Universal Lease scheme perpetrator Michael E. Kelly was recently indicted by the SEC for allegedly orchestrating a massive securities fraud that bilked investors out of more than $300 million. Kelly paid his selling brokers commissions totaling over $72 millions, according to the SEC indictment.
By using shell companies such as Yucatan Resorts and Resort Holdings, Kelly marketed timeshare interests in Mexico resort hotels, coupled with a pre-arranged rental agreement that guaranteed investors a fixed, high rate of return, claims the SEC. In reality, the money were used to pay earlier investors and fuel Kellys appetite for luxury goods such as yachts, sports cars and a private plane, according to the SEC. Kelly, the alleged mastermind of the scheme, was arrested on securities fraud charges in December 2006.
The law firms principal, John Chapman, commented, this [Universal Lease] is a familiar situation for our firms lawyers. Once again, elderly investors fell prey to corrupt Ëœentrepeneurs helped by unscrupulous sales agents, while those who were supposed to prevent that were asleep at the wheel. Chapman commented that his firm has already filed several claims on behalf of victimized Universal Lease investors.
The law firm of Chapman & Associates, LLC, http://www.johnschapman.com, often represents individual investors who have lost their savings in fraudulent investment schemes.
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