The Securities and Exchange Commission (SEC) has charged a man from Los Angeles for running a fraudulent scheme put in place to steal $43m (£34m, €38m) from investors.
According to the US regulator, Jason Sugarman secured financing to acquire control of investment advisers to use clients’ funds that were supposed to be invested in Native American tribal bonds.
However, Sugarman and his associates “misappropriated the proceeds for their own benefit”, the SEC said.
An ongoing case
Sugarman was also previously associated with Jason Galanis who has been handed down a prison sentence in 2016 in relation to the same bond scheme.
“These charges reflect that orchestrating a scheme from behind the scenes does not insulate someone from liability,” said Sanjay Wadhwa, senior associate director of the SEC’s New York office.
“As alleged in the complaint, Sugarman played a crucial role in obtaining control of advisory client funds so they could siphon off those funds for their own personal benefit.”
Sugarman has been charged with violating or aiding and abetting violations of the antifraud provisions of the federal securities laws and related rules, and the regulator is seeking monetary and “equitable relief” against the fraudster.