A Ponzi Scheme Targeted Ft. Lauderdale Gay Community
Federal prosecutors claim that a day trader, originally from Ft. Lauderdale Fla., has been allegedly swindling members of the gay community in Wilton Manors since October 2004, Forbes reported.
George Elia, 68, is charged with telling his investors that his company, International Consultants & Investment Group (ICIG), had significant assets and allegedly told investors that he was a skilled day trader. Forbes notes that according to the allegations against him, his record does not "necessarily bear that out."
Elia is also accused of running a Ponzi scheme. He allegedly promised extremely high returns on investments but the money that was returned to the investor was from new money via other investors.
The ex-Wilton Manors resident was indicted on one count of wire fraud on April 5. An indictment, Forbes points out, is only an allegation and Elia is innocent until proven guilty by a reasonable doubt. The next day, the Securities and Exchange Commission (SEC), a federal agency, which is responsible for enforcing federal security laws, filed a separate civil case against Elia and his companies for being involved in a scheme to defraud investors.
The agency’s complaint says that Elia and International Consultants & Investment Group violated anti-fraud provisions of U.S. securities laws and that he aided and abetted violations by the firms. Elia is listed as the president of defendant ICIG and of Third Party Defendants 212 Entertainment Club. "The SEC is seeking permanent injunctions against Elia and ICIG, disgorgement of ill-gotten gains plus pre-judgment interest, and civil penalties," Forbes notes.
The SEC’s complaint says that Elia, "orchestrated a Ponzi scheme in which Elia raised approximately $11 million from approximately 25 investors. Elia’s scheme was, in part, an affinity fraud: a number of the investors were members of the gay community in Wilton Manors, Florida."
"Elia falsely told investors he had a long track record of day trading stocks and exchange traded funds to yield annual returns as high as 26 percent, and that his trading on behalf of investors was paying quarterly returns of up to 20 percent," the complaint continued.
South Florida Gay News has been covering the story in depth. The Forbes article, however, is the first in a major national business publication. Forbes pointed out the "localized" nature of the Ponzi scheme to gay investors.