'Financial Guru' Accused Of Running Ponzi Scheme
Does anyone really think they'll actually get away with their Ponzi scheme? Because it may be happening again.
An entrepreneur with a larger-than-life persona floats a "no-risk" investment fund and has been charged with running a Ponzi scheme. Ephren Taylor, a North Carolina businessman, has been accused of of running "a well executed, carefully crafted fraudulent scheme," according to a class action suit filed in the District Court in the Eastern District of the North Carolina Eastern Division.
The complaint was filed by William Lee, Gennet Thompson and Gertrude on behalf of a class of similarly situated persons, whom they say number in the thousands. The filing of the complaint was first reported by the Courthouse News Service. The fallout from the alleged swindle is estimated to number in the millions of dollars. Taylor and a team of associates stand accused of using business entities known as Information Enterprises Unlimited and City Capital Corp., and and four others, to steal investors' funds.
The victims were allegedly charmed by legitimate real estate, financial services, and oil and gas enterprises to invest with Taylor and his empire. Taylor is said to have then promised "risk-free" returns on investments within 12 months. But when one Taylor enterprise, City Laundry, was sold, and investor William Lee was denied his money, Lee proceeded with the legal action. Investigations into Taylor's work uncovered the alleged Ponzi scheme.
"It is estimated that less than 30 percent of the investment proceeds were ever invested in real estate, sweeps machines or anything else," the complaint states. "The remaining proceeds were misappropriated and diverted by the City Capital conspirators to pay themselves, pay earlier investors or solicit new investors to perpetuate the defendants' fraudulent schemes."
Taylor's strategy was to target minority communities, often attending black churches to recruit new investors. He is said to have preyed on a "what happens in the church, stays in the church" ethic. He also sold himself as a self-made millionaire, whose successes began when he was a teenager in the 1990s. Among his early enterprises was a financial investment business that he began with a high school friend.
For his part, Taylor has remade his own personal website with an uncharacteristically humble note on his homepage. Posted in June, he wrote the following: "2011 has been an interesting year for myself personally. Needless to say it hasn't been short of major career and life changing moments for myself and my family. However, I wanted to take some time to drop a short note to the occasional blog readers on this post.... No matter what if your [sic] in charge and something happens its your fault. Always remember its 'Your Fault.' "
Of course, to even mention the word "Ponzi" in post-Great Recession America is to allude to Bernard Madoff. While named after businessman and con artist Charles Ponzi, no one -- including Ponzi himself -- has ever come close to Madoff's $60 billion swindle.
Decades of recruitment saw investors sign up with Madoff Securities on the promise of guaranteed no-risk returns. After being unable to meet redemption requests in the fallout from the financial crisis, Madoff turned himself in to authorities in 2008. And now, according to an Oct. 5 report in the Wall Street Journal, the trustee for Madoff's investment firm, Irving Picard, will begin making the first payouts to the scheme's victims. Mr. Picard and federal prosecutors have been able to recover some $11 billion of the swindled money. Much of it, however, is tied up in litigation.
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