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DOJ accuses banned advisor of running $6.8 million Ponzi scheme

The formerly banned investment adviser and donor to Donald Trump’s presidential campaign defrauded investors of more than $6.8 million, according to charges filed this week by the Justice Department.

David Shamens, a former Greensboro, N.C.-based advisor, was charged with one count each of wire fraud, securities fraud and money laundering, and the Securities and Exchange Commission also alleged this week that Shamens had committed Ponzi on dozens of investors. Was accused of running the plan. in several years.

Richard Best, director of the SEC’s New York Regional Office, said, “This is not the first time that David Shamens has been accused of misconduct by the SEC and serves as a good reminder for investors to search for potential advisors.”

Scamens was originally linked to several registered entities between 1986 and 1990, including Alex. Brown & Sons and Carolina First Securities, according to their Check Broker Profile, In 1992, the SEC settled the charges against Shemens, arguing that he “misused investor funds,” and the commission permanently barred him from the industry, According to the SEC complaint from this week.

Additionally, according to ProPublica, Scamens had also left campaign finance laws as head of the political action committee that supported Donald Trump’s 2016 presidential run.

In early 2014, Scamance began soliciting funds from investors that would facilitate trading on entities controlled by them, including TD Trading, TFG Trading and TradeStream Analytics. according to the justice department, Scammens reportedly told investors that his funds would be used to control short-term investment loans for day traders operating on the TradeStream platform, and that the trading group’s revenue would never be derived from investors’ profits. Will not done.

Scammens told investors that their investments would yield returns of 12% to 30% annually, but the DOJ argued that Scamens used victims’ money for their own purposes, including vacations, luxury cars and down payments on homes. . According to the DOJ, they used some of the money to turn out profits to previous investors. The SEC reportedly found that Shamens also used the money for attorney payments, retail purchases and political contributions.

Starting in 2019, Scamance added a new component to the scheme, urging investors to head to the Tradestream Algo Fund, an algorithmic trading pool they claimed to have developed. According to the DOJ, scams will ask investors to wire funds directly or transfer funds from their IRAs. To hide the fraud, Shamens would transfer investors’ funds through several different bank accounts that he controlled or had funds directed towards several unidentified law firms. The Justice Department claimed that scammers gave investors false monthly account statements, fabricated other statements showing positive gains for investors, and brushed off investors’ questions about delayed payments.

At one point a victim reportedly wrote an email called “Wits End,” in which they wrote that they “simply don’t know what to do to get our money from you.”

Chamens’s checked history extends beyond the securities industry; In 2016, he established the America Comes First Political Action Committee to support Donald Trump’s successful campaign for president. according to this Reporting from ProPublicaPAC failed to disclose any information about its funding, donors or spending to federal regulators.

Eventually, after regulators learned that most of PAC’s donations came from scammers, an attorney at the Brennan Center for Justice wrote that the group was essentially “not complying with any campaign finance laws.”

In A phone interview this week with the Daily Beast, Scamens claimed that the new allegations from the DOJ and SEC were the result of a political vendetta against him for supporting Trump, calling the charges a “thermonnuclear war.” (Schemes could not be reached for comment).

According to the DOJ, Scamance was scheduled for his first court appearance in New Jersey federal court last Tuesday; Each count carries a possible maximum sentence of 20 to 25 years, plus a civil penalty that can be as high as $500,000.

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