The US Securities and Exchange Commission has charged Geoffrey H Lunn, Darlene A Bishop and Vincent G Curry for their roles in making false and misleading statements to investors and misappropriating investors’ money in connection with a USD5.77m investment scheme under the name of Dresdner Financial, a fictitious financial services company purportedly based in Chicago.
The SEC’s complaint, filed in the US District Court for the District of Colorado, alleged that between February 2010 and February 2011, the defendants raised USD5.77m from at least 70 investors located throughout the US and several foreign countries.
According to the complaint, Lunn solicited marketers and investors to the scheme by telling them that he was the vice president of Dresdner and that Dresdner’s principals had connections to Dresdner Bank (formerly one of Germany’s largest banks).
As marketers, Bishop and Curry played significant roles in the scheme by soliciting and lulling investors while receiving payments from the investors’ money. The complaint alleged that Lunn, Bishop and Curry told investors that Dresdner offered 100 per cent guaranteed rates of return through a process involving the lease and monetization of bank instruments.
For example, the defendants told investors that by investing USD44,000 in Dresdner’s .44 Magnum Leveraged Financing Program, they would receive a payment of USD2m within 10 to 12 banking days. When they were unable to repay investors after the promised 10 to 12 days, the defendants perpetuated the scheme by repeatedly postponing the payout dates and claiming that the delays were due to holds placed by banks or the government. In reality, all of these statements were false and Dresdner and its investment programs were nothing more than an elaborate hoax.
According to the complaint, Lunn did not invest any of the investors’ funds as promised. Instead, Lunn began making cash withdrawals from the investors’ money after the very first deposit. Over the course of the scheme, Lunn withdrew over USD1m in cash and Western Union transfers which he claims to have given to Dresdner’s creator, a one-eyed man who used the alias “Robert Perello.” Lunn also gave at least USD848,500 to three Las Vegas call girls, paid over USD1.3m to marketers (including over USD650,000 to Bishop and Curry), paid USD1m to a favoured investor in a Ponzi-like payment, and using the remaining investor funds to pay for his personal and business expenses.
The SEC’s complaint alleges that Lunn, Bishop and Curry violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, the antifraud provisions of Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the broker registration provisions of Section 15(a) of the Exchange Act. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest and civil penalties against all three defendants.
