Retirement planning firm owner allegedly paid for lavish living expenses and more with elderly investors’ money
It has happened again. The Securities Exchange Commission (SEC) has uncovered yet another alleged Ponzi scheme targeting the most vulnerable of investors: the elderly. Clifton Stanley of Galveston, Texas is accused of cheating his elderly investors – those in their eighties and nineties – out of $3.8 million dollars in two related scams.
The first alleged scheme: PONZI
With promises of returns up to 36% per year, Stanley allegedly lured at least 30 senior investors into buying promissory notes from The Lifepay Group of Houston between 2010 and 2017 to the tune of $2.4M in unregistered transactions. LifePay is the retirement planning and real estate investment company owned by Stanley.
What did he do with the funds? According to federal court documents filed in Texas, he allegedly used the money to pay for his country club membership, lavish vacation cruises, spa treatments, jewelry and more. While he reportedly spent close to $1.3M on himself, Stanley is reported to have kept the scheme afloat by making approximately $1.1 million in Ponzi payments to convince investors that the investments were legitimate.
Unfortunately, some investors to whom Stanley paid these Ponzi payments ended up exchanging their mature notes for new notes in greater amounts, rather than being paid their principle when it was due.
Real-life examples of elder financial fraud
According to the SEC allegations, one of Stanley’s victims, a couple from Louisiana in their eighties, began with an investment of $25,000 in 2010, and ultimately ended up investing more than $700,000 in what they believed was a legitimate fund. Another alleged victim, a man from Texas suffering from brain injuries as the result of a stroke, began with an investment of $10,000 in a promissory note and ended up investing close to $600,000 with Lifepay, according to the SEC.
The second alleged scheme: promissory-note fraud
In 2015, Stanley partnered with Michael Watts in his next alleged scheme to defraud the elderly of their retirement funds. This time, the SEC says, they used an oil-and-gas company they controlled, SMDRE, in a promissory-note scheme.
In unregulated transactions, Stanley and Watts reportedly raised approximately $1.4M selling promissory notes to investors using their retirement funds. They did so primarily in face-to-face meetings, allegedly promising that the SMDRE notes were “safe and backed by stock” – however, the SEC says these statements were misleading and Stanley and Watts made material omissions when convincing individuals to invest.
Where to turn
While the SEC continues to make protecting senior investors a priority, many are still falling victim to predators who seek to take advantage of vulnerable individuals.
Should you or a loved one require the assistance of an experienced professional to help you evaluate your unique situation, trust the elder financial fraud attorneys at Silver Law Group. We understand the nuances involved in these cases and have helped many people achieve justice or recover lost money through litigation or securities arbitration. We may be able to do the same for you.
Call us toll-free at 1-800-975-4345 or send us a message through our online form.